Because of Batman’s paranoia and obsession.
Everyone, even the most powerful villain, is ultimately afraid of Batman. Many would never admit it and their craziness and narcissism does a good job of hiding it, but they’re scared alright.
Why? Because no matter what you do, no matter where you go, it’s all futile. The Batman will know everything about you. He’s probably watching or tracking you at this very moment.
Maybe you will get away with one small crime. Experience a bit of success. But there’s one guarantee and that is that the Batman will eventually catch you.
Batman even made contingency plans for dealing with the Justice League. He is so paranoid that he prepares for everything.
Ergo, he makes your existence as a criminal pointless. He puts you in a non-stop existential crisis. Just knowing that there’s a ghost in the darkness who is watching you and will eventually find you and beat you, is enough to make anyone scared shitless.
Batman is also scarier than Superman because people naturally fear the unknown. Batman thrives on that. He literally hides in the dark whereas Superman stands in the light. It’s easy to identify Superman and know what he can do. On the other hand, people can’t put a finger on Batman.
Batman would actually be less scary if he would kill, since that would just be a quick death. Instead, he will put you through an endless cycle where he confronts you with your own failings and beats you, both physically and mentally, over and over again. What can be scarier than that?
