Let's run through the Events of the Ending. Joker is in Arkham State Hospital, he is with a psychiatrist. This is supposed to mirror his earlier scene to show his growth. Note that his hair colour isn't green like it was earlier. He starts to think about something, smiles, then the psychiatrist asks him "What's so Funny?", "He says you wouldn't get it", cut to Bruce Wayne over his dead parents' bodies, then he decides to stomp her to death, getting the idea the song that's life. Now let me explain my Theory about what that scene means. A common theory is that he was thinking that whole thing in his head, but I think it actually happened. My theory is that this scene takes place the morning after his first encounter with Batman, during the encounter with Batman he recognized him from some where but couldn't place where it was. So the whole next day he runs through his life right before he got locked up, I imagine that he's been stuck here for a while which explains why he has Black hair instead of Green: It grew out and he cut it, through out the movie he's never killed anyone just because he could, he killed people that wronged him, killing the psychiatrist wouldn't make sense if he was much younger. He realizes that he created Batman and finds it funny. The only thing that is a bit of a leap is how he knows that Joe Chill killed Batman, perhaps he heard about it on the News. I like this theory because it doesn't diminish the whole movie as being a prank on the Viewers. What do you guys think?
Also in the Joker OST album, all of the songs are jumbled up, I thought that was a fun detail when they put it together.
I saw this movie in theaters, I think that ten or fifteen years ago I would have loved it but at my current age and level of maturity, I absolutely hated it. It paints Joker as an invalid, barely capable of taking care of himself, let alone running a criminal empire. It's basically a rip-off of several movies from the 70s, 80s and 90s, like Taxi Driver, The King of Comedy, Falling Down and Fight Club, but with Batman characters. As far as your theory goes, I wouldn't put much stock in it because all Joker did was lie to the audience. Who knows if anything in the movie even happened? What if he was locked away in Arkham the whole time and he just dreamed the whole movie? I wouldn't put it past the director to troll me like that because that's what this movie was: one big troll. It can't be trusted. And on top of that, it made everyone in mental health recovery seem like some kind of psychopath, which as someone with some pretty heavy duty mental health issues, I didn't appreciate. So while I can't analyze your theory, I can only offer my own insight that I got out of watching the movie, so take from that what you will.
While it did cross my mind that maybe the entire movie was supposed to be one big delusion, I think the only delusions he had was the one where the talk show host told him he wished he were his son, and of course the relationship with his neighbor. It was established that those were delusions, so it doesn't make sense to have a delusion within a delusion. At the end of the movie, I just figured his time in Arkham was spent building him up into the kind of Joker that we saw in the Dark Knight. In Arkham, he could have read up, studied, and better educated himself, so he could be the megalomanical criminal genius we've come to expect of him. Then when he breaks out, he has a sizable following who will work for him.
Of course, the joker as the guy who created batman would be ironic since in the comics, Bat Man is responsible for him.
