Gandalf the Grey was not supposed to be a mystic powerhouse but a wise counselor, that is true. However that is in line with the stipulations laid down by Valar so that he could even go to middle earth. Just because he wasn't supposed to be a mystic powerhouse doesn't mean that he wasn't. It's just that he wasn't allowed to use his magic to snap his fingers and make the Sauron problem go away.
That being said, you're right. According to the wiki http://lotr.wikia.com/wiki/Balrog
Balrogs were supposedly the most powerful of morgoth's servants.
The only real support for Gandalf's victory, (besides the fact that he is AWESOME) is that he is the secret wielder of Narya http://lotr.wikia.com/wiki/Narya
Which in addition to being a ring of power (re: massive Power booster for magical beings capable of using it)
Is explicitly titled, "The Ring of Fire" implying control over the Balrog's most potent element.
Also, according to its wiki page http://lotr.wikia.com/wiki/Durin%27s_Bane when the Balrog fell into the lake after being knocked off the bridge
The water quenched the Balrog's fire, reducing it to "a thing of slime, stronger than a strangling snake". In this relatively weak state, Durin's Bane fled
Granted once they emerged from the lake, The Balrog was able to reignite it's fires returning most of its strength through it. I have to believe, not all of its strength.