[Saurreg]

I suppose the Valars and Maiars would have knew of predestination by Eru and hence those that abide by his ways would have had absolute faith in the omnipotent one's plans. The only exception was Melkor who heard the words of the almighty but chose to go against it. As for Sauron, and the other lesser spirits who became corrupted, it is possible that they heard Eru but chose to ignore it or that the power of their corruptor was too strong to resist when they were in middle-earth. For example; Sauron could have his will and very nature bent by Melkor who was physically closer to him than Illuvatar and hence, perhaps could have exerted a greater aura of supernatural influence. Ditto for the balrogs.

Saruman was proud of his own knowledge and prowess and that pride was a seed of his downfall. Why he strayed from his mission and became a pale imitation of Sauron could be due to his own nature as well as the fact that his mission came from the Valars (not Illuvatar himself) who have been proven wrong before and with it came perhaps doubt of the fruitfulness of its objective.

The above two examples could be part of the "music" or the predestination of Eru, in which Eru intented for the corruption of Sauron and the fire-demons and the fall from grace of Saruman.

I also submit that the firstborn were so passive during the late Third Age because they have tired of middle-earth and life there. They have underwent much of the great pivotal events during its evolution and have come out from most part of those happenings on the "discounted" end. I suppose one can only endure this much disappointment, tragedy and horror before becoming spent and apathetic. Much like France during WWII when it was already scarred, ravaged and bled white by the previous great war. Not only was there a diminishing of spirits but also a diminish in power. Since the fall of Gil-galad, elven miltary prowess should have been on the wane and the magical prowess of generations of elves born outside valinor would have been minute also compared to their mighty forebears who returned to ME, fresh from paradise. So it would be a combination of being unwilling to be pro-active as well as being unable to.