I seem to recall reading somewhere - possibly in the letters' page of a mid-1960s Batman or Detective Comic? - that editor Julie Schwartz confirmed that originally it had not been intended that the Outsider would turn out to be Alfred (in fact Alfred was supposed to be permanently dead, but with the Batman TV show about to commence with a very much living Alfred, the edict came down to Schwartz to bring him back to life!), so someone came up with the idea that it might be a good plot device to bring him back to life as the Outsider.