Originally Posted by The Joker
They could have had crazies incarcerated in Arkham under the Dent Act, too. Releasing the Joker, who was the cause of the Dent fake legacy, would have had more weight and impact than some faceless Blackgate inmates.
but Dent arrested mostly sane criminals (so off to Blackgate)
And they couldnt have been transferred to Arkham since the only one who could attest whether they were insane or not was arrested by Batman (Crane)