What is so crazy about batsh*t?

Twice today, in entirely different written contexts, I have come across the phrase “batshit crazy” to describe something.

In one case it pertained to a lawsuit where the plaintiff made a ‘batshit crazy’ complaint. The other time was a description of Elon Musk (as being batshit crazy in what he has done to Twitter).

What’s the problem with batshit?

How did it get to be an extreme modifier of the word crazy? Is it insulting to bats and other flying mammals?