After Heath Ledger's sudden death back in January 2008, approximately about six months before "The Dark Knight" was released, there was much controversy as to how this would affect Christopher Nolan's Batman films.
Before Ledger passed, it had already been acknowledged that The Joker would return in Batman 3, now officially titled "The Dark Knight Rises", so it rose a couple questions: "Would The Joker be recast?", "Would they somehow kill The Joker off with editing?", "How will they suddenly just downplay The Joker not being around?", and that is just some of questions that had been put forward.
Christopher Nolan, the director who was, and still is, heavy hit by Heath Ledger's death has confirmed there will be no recasting for The Joker and the character will not be returning for further installments. Good on Nolan for not tinkering around with what Heath left us.
With some thinking, I came to a new possibility for how to explain The Joker's absence that I have never seen mentioned. The nonchalant fanboy theory would be that The Joker would simply be put into Arkham Asylum, which does make sense, but come on... he is The Joker. You think they could keep that dog in there without him breaking loose somehow after what he pulled with the cell phone fiasco?
So here is my theory... I beleive The Joker was killed by the S.W.A.T team we saw confront The Joker in the last seconds of the character's screentime. Really, it would almost be ridiculous to think they would not just be done with him then and there.
The Joker caused so much anarchy on Gotham City, seeing him be treated as any other crook in Gotham would be just a tad bit off putting and it is reasonable to beleive the S.W.A.T team were given orders to kill him. At that point, WHY let this insane terrorist live who actually managed to outsmart even the Gotham PD? Even if locked up in Arkham, again, the cell phone incident comes to mind.
Another problem I see is that because of what we saw Joker was capable of, how would you explain him not breaking out eventually?
This just my idea, and knowing the genius of Nolan I could definantly see him pulling off some new and original way not yet brought to the forefront to explain The Joker's sudden absence from the films.