The only places where Arkham Asylum really falls down are the boss fights. None of them are really that great.
[ Spoiler ]
Bane (and all the Titan henchmen thereafter) is a straightforward matador fight, Poison Ivy is more annoying than satisfying, although I can't quite put my finger on why, and Joker is incredibly anticlimactic.
It'll be interesting to see if and how they address the issue in Arkham City, but since boss fights are such a small fraction of the game I consider it a minor blemish on an otherwise fantastic title.