Well if he specifically meant that the "costume" aspect's only purpose is psychological intimidation, then all he was stating is the obvious. What other purpose could you argue for the costume aspect? You are giving him more credit than he is due, he wasn't trying to make a distinction between "costume" and "suit." In fact, he uses the term "suit" when saying that it's purpose is not protective. Go re-read it.
It is very true that even with a protective suit what Batman is doing is very dangerous, and he could die. But that doesn't mean his attitude should be "Screw it, I might die even with protection, so I'm just gonna go out there in spandex." With that attitude, he would have died when Scarecrow set him on fire. With good protection to add to his years of training toward combat/physical perfection, it is a dangerous but reasonable risk that he undertakes every night for a noble goal.
That's a good point, I'd concede that fact. Though I will say, for the majority of Batman's history, the suit has been only psychological. It's really been only in the past 20-25 years that it became a thing of protection (aside from specific instances such as when Finger had Batman wear a bullet proof vest under his costume against the Joker).
Really, I think that the reason it changes was due to a change in the style of Superhero comics. They moved farther away from the more fantastical an started telling more grounded stories. While in many cases I like this, I don't want to see too much emphasis put on the realistic aspect.
I actually like the armor, I think it works better then when Batman just goes out in his costume, but I wouldn't say that the character has to be armored. He still works with out it, (like I said before, look at Year One) it just requires more suspension of belief.
You honestly think that many people would jump to the conclusion that he's supernatural if he shrugs off getting stabbed? Come on. That idea may have been arguable in Bill Finger's time, but it doesn't hold water in ours. Maybe if he dressed up like an alien :gray:
Well, it would have to be in a certain circumstance. For instance, if I'm in a dark alleyway at night helping move boxes of
*insert random drug/stolen item here* and then I see a big shadowy figure in the shape of a Bat with glowing white eyes leap down from the rooftops and take down five men in a matter of seconds, then my first (illogical) reaction would be that it's not human.
I would be scared *****less, and I wouldn't be thinking clearly. Add to that, if I saw someone stab this thing in the back and it shrugs it off and keeps fighting, I'd be even more sure that it wasn't human.
Of course, it would be at night and I wouldn't have a clear view of Batman either. I would probably only be able to make out a flapping cape and his outline.
I think it's not too illogical for someone in that situation to think that it's a supernatural creature. People today aren't exactly completely logical thinkers. Otherwise why would people still believe in things like the Lockness Monster, Bigfoot, or the Jersey Devil?
If people weren't apt to believe (even if it's a little bit) in the supernatural, then shows about Ghosthunters, or the creatures I mentioned above wouldn't be getting made still.