Originally Posted by Broker
I understand the logic in your thinking, but I would say that it was made explicit that Batman has not been seen in 8 years.
By the police. Or rather "confirmed sighting." That does not mean he was not quietly involved in some way. It could explain his injuries and why he bothered to rebuild the batcave. Alfred even said, "You haven't been down her in a while, sir." If he retired when Dent died (before the mansion was even done being rebuilt), he would never have been down there.
It would takes months for the Dent Act to pass, if not a year. It would then takes months or even years for it to be fully enacted. In that time, there would be the "war" Foley spoke of. Perhaps Batman played a secret part in it. There were bound to be some copy cats inspired by the Joker. In fact, if there were more theatrically-themed villains (the Riddler? A black mask wearing gangster? Ivy the eco-terrorist? A Lewis Carroll-obssessed predator?), it would explain why nobody bats an eye to Catwoman wearing such a theatrical costume in TDKR. It's par for the course in Gotham post-Joker.
Most of those guys would be sent to Arkham and could be raving about the Batman which Gordon would dismiss. I admit this is speculation, but it logically makes sense more than just quitting cold turkey. Though the movie never explains this aspect.