I'm not saying I reject that interpretation, of him being insane, but if he were accused of that in-universe, he'd say "What, and letting them suffer and possibly die is more sane?"
The intriguing thing about Batman, and why I find Facehugger's well intentioned and obviously sincere love for the warehouse scene so disagreeable, is that Batman is at his best when the writer is mixing his compassion and respect with his dislike of crime and the criminals he's fighting. People love the killing joke, but they mostly seem to like how tortured the Joker is in that story and ignore Batman. Whereas what I find interesting about it is that this is one story where Batman is trying to just....end their fighting, because he is trying to see the Joker as a fellow human being and the joker is, in a really twisted way, trying to do the same. It's a comic about how two broken men are trying to find a genuine emotional connection.
Batman's always meme'd as a billionaire who goes out to punch poor people where if he really wanted to help, he'd use his billions to fix society, and I don't disagree there is something to that, and others want to see Batman as an ideal hero that has nothing but warm fuzzies for his enemies and the all the fighting is a frustrating and depressing part of the job he is forced to do. I kind of want both. I want a batman that does actually enjoy the violence and righteousness of being a hero, but refuses to dehumanize his enemies and will always see their lives as worth saving. So he's not in denial that he enjoys life as batman, but isn't dehumanizing about the pain he's causing, and is kind of aware that the situation is kind of fucked up...but in my version of the story, Gotham is also fucked up. Like, not just the supervillain/superhero parts of it, all of Gotham culture is like Florida but instead of stupid it's gothic-y and cruel and angry and fuck you. So as potentially fucked up Batman it may seem for Batman to go around worrying about the wellbeing of the people he beats up, it's actually radical for a Gothamite because everyone's conditioned to just leave people bleeding out on the street.