It's about context.
If that was a panel in lets say one of Scott Snyder's many grimdark stories like Death of the Family that would be one thing.
However the rest of the Joker cover variants for that month are lighthearted in comparison and don't depict anything more than a harmless crime, standard attack or prank from The Joker. At the most you'd get Joker venom victims. It definitely comes across as something more mean spirited and in bad taste when compared to the rest.
I mean compare the following sequence of images and let me know which one completely sticks out like a sore thumb.
Another thing is that particular comic series is not only lighthearted & tonally positive but also features a heroine who embraces superheroics and does her best to be the most competent hero that she can be.
Here we have the foundations of the book's tone completely shaken up to the point that it lands on the opposite end of the spectrum unlike the other variant covers. On top of that we have the competent heroine who smirks at the face of adversity cowering like an incompetent victim and with tears of horror in her eyes to further accentuate that point at that.
Hell yeah that could come across as pretty jarring especially to people who regularly read that particular title. I'm sure if a Joker variant for Red Hood & The Outlaws featured a similar scenario with Joker hovering over a cowering Jason Todd with a crow bar it would also ruffle feathers. Simply because the tone and content of RH&tO doesn't gel with portraying Jason in that light.
So I see no problem with people not only being offended by it but the artist himself deciding he'd like to have it pulled from publication altogether. Remember it was the artist who made the suggestion and insisted on it to DC not the other way around.
Bad taste is simply bad taste and I'm glad I live in a society that is still mostly sane enough to comprehend that.
Furthermore I'm someone who completely hates the notion that some creators and fans have that The Killing Joke must always so greatly define every single moment of Barbara Gordon's life. To the point that it becomes a crutch and makes it seem like she was not able to overcome that adverse situation because it never leaves her mind.
Or how it promotes the notion that she's pretty much nothing without that story defining her; well I'm glad to see people take a stand against further exploitation of that overrated ass story's narrative.