Mjollnir said:In The Lord of the Rings a wizard like Gandalf faced in melee combat a demon (fallen maia) like the Balrog, so in game terms he was supposed to have enough toughness to beat it.
You mean a DEMIGOD like Gandalf. It has been very well and very conclusively established that Gandalf was a Maia, of the same order of beings as Sauron, essentially a demigod.