Joker's not supposed to be funny here, he's supposed to be psychotic.
Yes it is, it's called "refusing treatment" and it's pretty much a right that every American has. Not acid, oil. Weren't you even paying attention? And what do you mean "on-queue?" It's spelled cue, by the way, but besides that, what was the cue?And what were you expecting to begin with? To be surprised that Harvey was going to become Two-Face? How is it contrived that that's the way half his face get's messed up? It's not any more outrageous than how they did it in The Animated Series (explosion) or in The Long Halloween (acid during a trial). It fits right into the framework of the story.
A criminal who's done time and knows that people shouldn't be playing into the hands of a whackjob like the Joker tossed the detonator out of the window. That was kind of the point of the scene. Yeah good luck with that. What is it, the second reboot?