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As I'm sure you can see, I am a HUGE fan of the Joker and before you can even think it, I was a fan BEFORE The Dark Knight came out, but more on that in a little bit. This is basically my thoughts on how DC handles him.
If you were not aware, the Joker first appeared in Batman #1 in the spring on 1940, making him one of the very first recurring villains. When he first appeared, he was a homicidal maniac without any remorse. During the 50's, the Comic's Code turned the Joker in a bumbling idiot with crappy jokes. He was returned to his former glory in the 70's due to Dennis O'Neil and Neal Adams. Since then, he has been a prominent player in the DCU and one of the greatest villains of all time. Everything seemed to be going well until the fateful day of July 18th, 2008.
That Friday, The Dark Knight hit theaters and everyone and their grandmothers had Joker fever. You couldn't go anywere without seeing his face. T-Shirts, cereal boxes, Fruit Roll Ups...EVERYTHING!!! Was I happy to see everyone honering the late-and-great Heath Ledger for his final and greatest role? Yes. Was I happy that Warner Brothers was whoring out my favorite character so much that my eight year old sister wanted to be the homicidal clown murderer when her and her little cousins played Batman? No. I get it. He was badass in that film...but really? Do we really need a homicidal clown being the inspiration for eight year old's?
Then, with the GIANT behemoth that was TDK, DC started to whore the character out into every book they could. Yeah, he was everywhere already, but I mean come on. He was one of the first villains. Joker should be out there causing as much chaos as someone like Sinestro or Darkseid. He can do, if he is written well enough. I think Grant Morrison did an excellent job in Batman and his historical graphic novel Arkham Asylum: A Serious House on Serious Earth. One of the parts that stuck out to me in his Batman run was in the first part of R.I.P. were the Joker is daydreaming. The world has erupted into a frenzy as Joker has killed millions by using a Joker-Poison Parvovirus. Using Parvovirus as a carrier for his Joker venom is ingenious. There would be no way of stopping it. THAT'S a GREAT idea for a Joker tale that could put him back on the map as one of the DCU's main baddies. He'll always big one of the biggest baddies but at this point, I feel like he is just a gimmick for fans to buy a book.
Also, Morrison wrote Batman #663, which shed more light on the aspect of Joker's rotating personality. If your a Joker fan, you need to pick up every story written by Morrison that Joker is in (the rest of the series is amazing too). I'm not saying that Joker can't be written well by other writers, but it seems like Grant is the only one that gets him anymore (Azzarello did an amazing job in Joker).
I hope that somehow Morrison incorporates his Joker-Virus epidemic into one of his Batman volumes but I don't expect him too.
Joker is really good. When it comes down to straight craziness, I gotta go with Arkham Asylum.
As for saying he should be as big a threat as Sinestro or Darksied I'll respectfully disagree. While I will agree that Joker is awesome I just don't think being a threat to civilization suits him. He's at his best when tormenting individuals or small groups rather than everyone alive. If he ever posed that kind of threat Gotham PD would just shadow him and shoot him in the head (we know he has to surface at some point and his need for theatrics make that inevitable). You can't really do that with the heavy hitters.
It's the same reason that good crossovers between Batman and Superman are hard to come by. Superman could flatten most (not all e.g. Rahs Al Ghul) of Batman's enemies in seconds, whereas Batman wouldn't be able to approach the likes of Brainiac or Solaris.
This reflects for me what both heroes are about. Superman is the guy who'll defend us from alien invasions and evil gods and Batman is the guy on the streets stopping scum from preying on those who can't defend themselves.
It wouldn't really make sense for Joker to try and take over the world, it's beyond his ability. I hated "Emperor Joker" since it just seemed like a love letter to the guy but loved "Killing Joke" since it made him that bit more frightening when his campaign was so precise and brutal.