FUN FACT: This was improvised. The building was meant to explode and come down in one go and the crew had one take to get it right. When the explosions malfunctioned, Ledger reacted in character, and Nolan urged his crew to keep filming. By pure chance, it resulted in one of the greatest moments in the movie, and a moment that perfectly showcased Joker's archaic nature and Ledger's sheer talent.
The joker did it because he believes that everyone has a breaking point, everyone's evil, and so to prove his point he drives people to kill. To become evil.... Just as he is evil, to stoop to his level