I'll say it again, A Joker that looks like this:

just wouldn't fit in Nolan's imagining of the Batman universe. You can bitch and moan about how some of the shit he's doing is raping the Batman franchise and its mythos, but he couldn't give two shits. Batman as a character has
always worked the best when it's told in a semi-realistic fashion with a believable story and characters (I know, lol for me saying comic characters are *gasp* believable). Nolan wants to make it as realistic and emotionally interesting as possible, and the audience isn't going to feel that if a Joker comes parading about on-screen looks like he was literally painted like a fucking cartoon character.
And then you can continue and tell me that the Joker SHOULD look like this because he essentially is SUPPOSED to look like that. That that's why the Joker is so interesting in the first place. But this is the Nolans' and Goyer's vision in how a man would somehow become this twisted, scarred and gruesome looking while still coming off as a kidder.
The Joker can work in a gritty environment, people just don't how to handle him in such an environment other than this portrayal.