It's not just about having the power...

[Eönwë]

Originally Posted by alatar

I think that Gandalf felt this way. He could have fought Saruman, but he didn't want to start a fight which, even if he won, would only have resulted in the destruction of his foe, and I don't think that he wanted that. Even at the end he wished that Saruman found healing, and it may be that he felt the same about Sauron.

Also, remember Frodo and Gollum. The one who still holds true doesn't kill the one who was corrupted.

Maybe a better comparison would be to Manwe and Melkor. Melkor was chained up for ages (literally) and then released back into thw world. I'm sure a similar thing would have happened if Saruman hadn't escaped.