Who's going to be afraid of a guy dressed in a bat suit?
Again: Night. Dark. Shadows. Hard to identify the big dark thing coming at you very fast out of the corner of your eye. Maybe all you see is something that looks like it has wings and devil horns. See Batman: Year One
, the police briefing about the eyewitness reports from Batman's victims, including Detective Flass. Many of them insist they were attacked by a monster rather than a man. Or look at the B:TAS episode "P.O.V.," where things happen so fast that the rookie cop thinks Batman has superpowers when he's just using his gadgets. Human perceptions are very fallible, especially when dealing with the unusual. We often don't see things for what they actually are.
Plus, you know, criminals are a superstitious, cowardly lot, so...