[Thingol]

Well first off Illuvitar sent Gandalf back, not the Valar. Another question could also be, what happened to Gandalf’s staff when he was captured by Saruman? There are two possibilities for the significance of the Istari's staffs. One is that the staffs are purely symbolic. Saruman's staff breaking is a symbol for Gandalf removing him for the order. It is not that Gandalf breaks Saruman’s staff and subsequently Saruman loses his power. The second possibility is that the Istari needed the staffs to channel their power. There are draw backs to both possibilities. If the staffs are purely symbolic then why was Gandalf unwilling to leave it at the door of King Theoden? Tolkien never specifically stated the significance of the staffs, so pick your poison. Personally I tend to believe that the staffs are purely symbolic because it causes less problems. If the Istari needed their staffs then how was Gandalf able to defeat the Balrog after his staff was broken? It also causes less problems with Saruman’s capture of Gandalf. If the staff is purely symbolic then there is no reason why Saruman should have to take the staff away from Gandalf. Perhaps it is a combination of the two. The Valar placed limitations on the powers that the Istari could use. I’ve always thought that at least to some degree the Istari adhered to these limitations voluntarily. The staffs were probably part of this limitation. The Istari could channel their power through their staffs, but it was not absolutely necessary; in special cases, like the fight with the Balrog (where there was no one around) the staffs would not be needed.