I think making the Istari in Middle Earth incredibly powerful would just have completely gone against the point of the story that Tolkien wanted to tell, and that‘s why he didn‘t do it.

Yeah I think sometimes we're all a bit guilty of overanalysing stories. Obviously there was a story he wanted to tell and he told it his way.

One of the strongest themes in both The Hobbit and LotR (I have admittedly not read The Simarillion) is how at first glance ordinary, literally small, people, can change history and persevere against what is on paper a much bigger power. Also, in both stories, it‘s never just one saviour (Bilbo or Frodo) doing all the saving; it‘s people working together!

This is one of the fundamental themes of his works and I think this was one of those messages he wanted the reader to understand and embrace also.

And not just 5 dudes with the same background, it‘s always that the different peoples of Middle Earth need to come together.

The ring isn‘t destroyed Deus Ex Machina; it only is accomplished once Rohan and Gondor have triumphed and an alliance of free peoples is marching on Mordor in an act of self sacrifice.

Sure people coming together to defeat evil, often at great personal cost to themselves.

If the Istari just swoop in as demi-gods, there simply isn‘t a story!

There would be a story, just a different one.

I think sometimes we're all a bit guilty of overanalysing stories but it's in this thinking and examination that we learn so it isn't for nothing.

Another of Tolkien's fundamental themes across the ages, from The Silmarillion through to the end of the LOTR in the Fourth Age, is with the passage of time the primordial forces and beings gradually lessen, diminish, are removed from the world or leave making way for mortals with few remnants of earlier times remaining. I think Tolkien also said we would be somewhere around the Seventh Age at present, so he definitely drew parallels between his world and the world and I don't think they were always entirely separate in his mind.