The deformation of a liquid capsule enclosed by an elastic membrane in an infinite simple shear flow is studied numerically at vanishing Reynolds numbers using a boundary-element method. The surface of the capsule is discretized into quadratic triangular elements that form an evolving unstructured grid. The elastic membrane tensions are expressed in terms of the surface deformation gradient, which is evaluated from the position of the grid points. Compared to an earlier formulation that uses global curvilinear coordinates, the triangular-element formulation suppresses numerical instabilities due to uneven discretization and thus enables the study of large deformations and the investigation of the effect of fluid viscosities. Computations are performed for capsules with spherical, spheroidal, and discoidal unstressed shapes over an extended range of the dimensionless shear rate and for a broad range of the ratio of the internal to surrounding fluid viscosities. Results for small deformations of spherical capsules are in quantitative agreement with the predictions of perturbation theories. Results for large deformations of spherical capsules and deformations of non-spherical capsules are in qualitative agreement with experimental observations of synthetic capsules and red blood cells. We find that initially spherical capsules deform into steady elongated shapes whose aspect ratios increase with the magnitude of the shear rate. A critical shear rate above which capsules exhibit continuous elongation is not observed for any value of the viscosity ratio. This behaviour contrasts with that of liquid drops with uniform surface tension and with that of axisymmetric capsules subject to a stagnation-point flow. When the shear rate is sufficiently high and the viscosity ratio is sufficiently low, liquid drops exhibit continuous elongation leading to breakup. Axisymmetric capsules deform into thinning needles at sufficiently high rates of elongation, independent of the fluid viscosities. In the case of capsules in shear flow, large elastic tensions develop at large deformations and prevent continued elongation, stressing the importance of the vorticity of the incident flow. The long-time behaviour of deformed capsules depends strongly on the unstressed shape. Oblate capsules exhibit unsteady motions including oscillation about a mean configuration at low viscosity ratios and continuous rotation accompanied by periodic deformation at high viscosity ratios. The viscosity ratio at which the transition from oscillations to tumbling occurs decreases with the sphericity of the unstressed shape. Results on the effective rheological properties of dilute suspensions confirm a non-Newtonian shear-thinning behaviour.