Ever since Smallville, WB seems to want to make Green Arrow a tv Batman. So I am not surprised we're getting Batman characters in Arrow. I wouldn't be surprised if Nightwing pops up next season.
Maybe red sunlight and magic might be too far out there for this movie franchise. They could always go the Doomsday method, just keep superman busy until his energy reserves run out.
Smallville had the problem of the Bat Embargo to deal with (Otherwise known as the stupidest idea a company has ever made, ever. Yes, worse than Spider-Mans deal with Mephisto). So Batman couldn't be used in the show (the creators mentioned they did want Batman originally). Green Arrow is a good replacement though, different in ideology, but similar in premise. Billionaire vigilantes that run mega corporations, and are inspired by classic film serials (Robin Hood and Zorro).
I don't watch Arrow. But I can see why they'd want him more Batman-like, DC has always tried to make Green Arrow popular. He had alot of Justice League Unlimited episodes dedicated to him after all, and now he has a popular show (Probably the most out of DCs TV Line-up. Since many don't share my love of Constantine). So it's working in some right to use him as a Batman Expy. Makes it easier to latch onto a character that's similar to another, more popular one.
Considering Wonder Womans origin is really out there (She's a clay person the greek gods gave superpowers too) Magic isn't too outta left field.
@Heimdall
Also Deathstroke is hardly a Batman villain. He started out fighting the Titans, so he's not exempt from fighting anyone else.