Originally Posted by Mansun

Don't forget that in the first film & book, Gandalf the Grey appears anxious of an encounter with the Balrog of Morgoth, even afraid. But after a titanic battle he defeats it & his superiority is highlighted against all save Sauron (& perhaps Saruman at the time).

I believe that a similar thing was about to happen when the Witch King confronted Gandalf the White. The Witch King inspired anxiety into Gandalf, but ultimately Gandalf would have been victorious if the two fought in battle. (I don't think the Witch King would have defeated the Balrog - more likely he would flee from it at the death of the battle. We never actually see any proof of how powerful the Witch King was in the book or the film, but we did with Gandalf).

Maybe PJ thought GANDALF vs WK would take away the focus of the film away from what it really was about - not a duel between two powerful individuals, but a battle between Aragorn for the free people of ME & Sauron for Mordor.