I am sure you are not alone, but let us not forget 2 things, it had only been 8 years since the Iran Hostage Crisis and the Iran-Iraq war had been going on for most of the 80’s. With the US, UK, USSR & many middle-eastern countries backing Iraq.
Having been around while that was all happening, the idea of Joker being hired as an Ayatollah-sanctioned Iranian terrorist wasn’t actually that big a stretch. If the Joker would have existed on our earth, I wouldn’t have put it past Khomeini. Especially in the last year or so, as Iran had lost a number of crucial battles and Iraq had been deploying chemical weapons and targeting civilians. So the use of terrorism as a strategy was not out of the question.
It’s easy to look back at it now as Islamophobic, but it also is a product of its time. Just as how certain depictions in comics during WWII look incredibly disturbing today as well. The world was a different place 32 years ago. As it was 40 years before. And will be 32-40 years from now.
Comics are always a product of their time.