OK, so the whole thing where Oracle is overdosed on fear gas and ends up using her last ounce of strength to shoot herself and escape the scary things? In itself, that's actually a really really good story beat. It makes sense; it dovetails perfectly in with Scarecrow's whole deal. It's a beautifully rendered picture of what fear gas will do to you: ramp up your fears scarier and scarier until you're a danger to yourself and others.
However, when we dial it out later, we find out that it didn't really happen, which could also be fine, except that it was an hallucination Batman had, triggered by that same fear gas.
Everything else we've seen about the gas shows that it makes the subject afraid, sparking whatever hallucinations induce that state, like a nightmare in which you're being chased. But you know what never happens in the "I'm being chased" nightmare? You never get caught, because your subconscious is in the fear or flight state, not the "I got caught" state. Even if your mind takes the dream to a place where you can't possibly run any further, it just ends.
As the fear gets stronger and stronger in Batman's system, it makes no sense for him to hallucinate a loved one dying, because that experience doesn't magnify the fear; it resolves it, which is exactly what the gas shouldn't do.
Does this horrible image produce negative emotions? Sure! Take your pick: self-hatred, anger, sadness, helplessness, etc. But none of this is fear, and Crane's creation isn't Negativity Gas or Sadness Gas, it's Fear Gas. Crane is a twisted genius obsessed with fear, who's spent his entire career learning how to induce fear; he can't order a pizza or tell his minions to pick up the dry cleaning without mentioning fear. (Seriously, listen to his dialogue in the game; it's pitiful.) There's no reason to believe his gas does anything other than what it's supposed to: induce incredible fear and nothing else. Throughout the rest of the game, it works just like it's supposed to. In this one case, it does the opposite. That goes beyond weak writing.
This is doubly bad because, as described above, the situation with Oracle is such a well-written use of the gas. Then we find out it didn't happen, and that what actually happened makes no sense, in a single stroke.