I'll reiterate that I don't believe it to be the case that animals with smaller brains are not self-aware, but wanted to counter that it HAS to be a smooth gradient of level of consciousness between simpler and more complex brains. It can be stepped.
However, if it were the case, you don't need to explain it, only observe it. For example, I think we can say from observation that there needs to be a minimal complexity. n-neurons cannot be self aware and n+1 can. I'm sure it's not just the number, but you get the point. The gradient of self-awareness need not start at the gradient of intelligence, nor need it have the same slope.
I don't believe in non-physical explanations. We don't know the mechanism though, so we do actually do need to explain why some permutations of matter, as you put it, (i.e. the permutation in brains) has this sense, and others (matter in rocks, matter in computers?) does not. Although I'd think process, rather than just arrangement.
