Killing low level thugs vs letting the joker live doesnt make sense. After all he's donex why let the joker live?
Hallucinations/dreams whatever. He still has no previous knowledge of them, so it made no sense for him to dream about that. Of course its forewarnings, which is why he wants to find the others to form the JL
if Batman kills him then the joker wins and gets what he wanted. Bats is doing his job and putting him in jail. Why doesn't the justice system put the joker under the death penalty and kill him that way instead? Why is it exclusively up to the Batman? Why not robin or Jim Gordon? I'll tell you why, because it's freaking comic books
Also, there is always the threat that if he killed the joker, someone else (who could be much worse) might pop up and take his place, or maybe two or three other people instead. There is no way to really know.
I think the flash appearing and that knightmare desert scene aren't typical "dreams". Someone else broke it down in the thread before, but I think that when the flash broke the time barrier he collapsed different realities into each other, so Batman doesn't have to know who the people in his dreams are in order for him to dream about them.
It's just things that are gonna happen in the future