I'm only in the beginning of Arkham City and already Batman is looking pretty messed up. Most of the beginning of the game involves him taking blows, getting tazed, and all sorts of other things. This works though because every antagonist in the game has something in mind for Batman aside from killing him. That is the key part here, because whooping on yur PCs when the goal is to kill them makes for a short game. Whooping on them when the goal is to do other things makes for a fun adventure.
So, maybe next time that fight is going a bit too one sided in the NPCs favor you don't pull punches or pull back on what is going on. Maybe you knock them PCs the hell out, and then have them wake up in the middle of the bad guy's plan. See how they react. See how they do. Will your PCs listen to the bad guy if not doing so means their heads can be blown up? What if it means their darkest secret will be revealed to all?
Try it and find out. That is the first lesson Arkham City teaches.