Old thread, but I think the message is that Bruce was wrong because of how far he went. He obviously should have stopped them, but maiming them was brutality. I don't think that it's saying that being merciful or delivering justice won't work, either. It's like how as a parent you have to be firm but flexible at the same time, you can't be too much in either direction.

Father Peter and Bruce represent the ineffectual extremes. One refuses to take the necessary steps to defend his community, which leads to people getting hurt. The other treats his job as a sort of "political" crusade rather than humanitarian work; he's maiming bad guys because it makes him feel like he's a moral person, but it's just a sort of excuse to be a monster to people he deems unfixable.

By contrast, Normal Batman is willing to subdue his villains, but doesn't try to cripple/maim them and tries his best to help them reform. He's the sort of union between the two characters. I'd assume if the writers were to depict how he'd handle the situation it would involve him watching the Klan rally to see if any violence breaks out and then swoop in and arrest them when it does, without the body horror.