The man regularly outwits far more supposedly cognizant opponents including Batman and Lex Luthor, who are canonically recognized as two of thr smartest people on the entire planet.
Edit: I’m not saying insane people are stupid, I’m saying that Joker’s mental illnesses are pretty obviously behavioral, they don’t affect his perception of reality. He’s perfectly capable of understanding what he’s doing and how it’s wrong, in fact his character almost doesn’t work if he doesn’t, he just thinks that it’s all hilarious anyways. That’s why I said he’s not insane, he just pretends to be, because he’d be fit to stand criminal trial as fully competent and cognizant of his actions.
My point is that he doesn’t have a warped perception of reality (in the diagnosable sense), being criminally insane would require that he be incapable of understanding what he’s doing and/or the reasons why doing those things are wrong.
Joker not only is perfectly capable of understanding he’s doing wrong and why the things he’s doing are wrong, to him that’s the entire fun of the joke.
I agree though that’d be an amazing story, but what’d be even better would be if it was a story about Batman defending the joker’s insanity plea because it turns out that his own no kill rule is actually a legit mental health disorder compulsion that extends to doing everything (legally) possible to prevent a jury ruling that leads to a death penalty sentence. It’d also be a pretty stunning reversal of Joker’s typical “one bad day” philosophy, that Batman is sticking his neck out in the court of public opinion on the belief that even the joker can be rehabilitated.
Honestly you could probably insert them as The Buddha and Angulimala and have a fucking wicked turnaround about what redemption actually looks like, because that story doesn’t just feature an absolutely heinous criminal turning his life around and in the end actually achieving enlightenment, but also him having to live with not everyone forgiving him or even owing him forgiveness because all the atonement in the world doesn’t change that he still did real harm to them that can’t be undone.