I’ve just reinstalled Grim Dawn, having last played it some years ago, and am currently working my way through Act 2. I don’t frequently play ARPG’s, but I’ll try a new one when I get it in a bundle or somesuch. Mostly, they don’t hold my interest. Grim Dawn, vanilla and unmodded (I assume there’s some kind of modding scene; haven’t looked yet) still manages to scratch that itch for me. At some point I’ll pick up the DLC. Right now I just want to find something good enough to replace this crazy caster 2h sword I’m using, so that I can bring Albrecht’s Aether Ray back into the rotation!
Perhaps the Balrog underestimated Gandalf, thinking it could cast him into the abyss, then fly back up to deal with the rest of the Fellowship. Alternatively, maybe it calculated that its best chance of defeating the wizard was to grapple with him at close quarters. Either way, the Balrog falling doesn’t necessarily mean that it wasn’t capable of flight.