Exactly. And if Batman is sending people there knowing that, that's pretty bad, especially as he knows a lot of the people who he fights are seriously mentally ill, and it's worse in a lot of versions, where, as you say, Arkham is downright Victorian or worse, and where terrible things happen there with some regularity.
If he really cared, he could make it state of the art and really about helping people, but the issue is, several of the villains could basically cured/fixed then, and suddenly his rogue's gallery would get a lot smaller. Which his writers generally don't want.