In the notes to the script included in the 15th anniversary edition, Morrison admits that this interpretation of the Batman (as an insecure, sexually repressed, infantile mama's boy) can only apply to this comic, that it's meant to be a death and rebirth for Batman. Invoked by Morrison in response to all the interpretations of Batman as borderline sociopathic, and partly because this was one of Morrison's and McKean's earliest professional projects.
Though the abstract storytelling makes it hard to know for sure, the story also leaves open the suggestion that Bruce Wayne may (or may not) really be either...
A) Possessed by an evil spirit that gives him a symbiotic connection with Arkham Asylum.
Most incarnations of Doctor Destiny have him as a 7-foot tall, muscular titan with a skull for a head. Morrison re-imagined him as an emaciated cripple, trapped in a wheelchair, wasted by his inability to dream. This incarnation was used by Neil Gaiman in The Sandman, to good effect.
And You Thought It Would Fail: In one of the anniversary paperbacks, Grant Morrison recalls how an early version of the script was passed around for people to look at. Most of them thought the psychological horror and heavy symbolism was not only a failure, but the dumbest Batman story ever. They all laughed their asses off, and in the paperback, Morrison asks them Who's Laughing Now?.
Awesome Art: Words cannot describe how horrifying and amazing the artwork looks.
Crosses the Line Twice: Call it sick if you want, but Batman defeating Doctor Destiny by pushing him down a flight of stairs is audaciously, "I'm-the-goddamn-Batman" hilarious.
Harsher in Hindsight: The Joker's crack about Robin was written before Jason Todd had died in the regular books but the book came after. Morrison noted all it did was add another layer to the Joker's audacity in saying it.
One-Scene Wonder: Maxie Zeus only appears for one scene, but leaves a major impact. His only real role is to talk to Batman a little bit and not get any response, but his speech is chilling and sets the mood of the story perfectly.
Sequelitis: A "spiritual sequel", written and illustrated by SamKieth and entitled Arkham Asylum: Madness, was released in 2006.