[Lord Gothmog]

Interesting points Farael.

Gandalf and the other Istari were forbiden from showing their full power in regards to the fight agains Sauron thereby preventing Men from becoming dependant on the intervention of "Higher Powers" in matters pertaining only to Middle-earth.

However, I do not believe that this would cause a problem in the fight between Gandalf and Durin's Bane. The main reason that I think this is that Gandalf did everything he could to ensure that this fight was private. He told the rest of the fellowship to leave before he attempted to stop the Balrog and when he was pulled after the balrog his last words were 'Fly you fools'.

So in the case of Gandalf vs Durin's Bane we have a private fight between 'Self-incarnate' Maia (Durin's Bane) and 'Incarnate' Maia (Gandalf). I think that by the time of TLoR it was not the weapons that was important but who was involved. Other than Maiar it was only "Great Elf Lords" who were able to defeat a Balrog and even then only at the cost of their own lives.

Even Gandalf who as an Incarnate Maia could only defeat the Balrog at the cost of the life of his physical body. Had he not been sent back (probably by Eru himself) this fight would have been the end of his mission. What chance then that any other in the fellowship could have even defeated the Balrog let alone continued after?