Precisely. I'm pretty sure that most ordinary Gothamites are more or less aware that, yes, Batman is real - he's had some fairly public battles, and during 'Knightfall', Bane tossed his broken body into the middle of a crowded city square - but they don't know the details. All they've seen of him - if they've seen anything - is a quick flash of a cape on the evening news, or the Batmobile screeching around the corner. And if they unluckily happen to be a member of the 'superstitious, cowardly lot' which Batman has actively FOUGHT against, they're probably only really aware of a moving blur of darkness, out of which fists periodically emerge, and sometimes Batarangs. He sticks to the shadows, he uses a rough, scary voice, bullets seem useless against him - he's a crook's idea of the boogeyman. And as long as he STAYS that way, the more and more outrageous the stories about him are going to get. If someone sees a clear picture of him, they'll see a guy in a cape, and go 'man, I could take care of HIM! He's just a guy in a cape!'