I'd say at 850-points up the Balrog is probably all right, maybe even a little lower than that. In all honesty, he's not that amazing from what I recall from seeing him used and reading online; he's powerful, yes, but also the second or third most expensive model in the game after Smaug and possibly Sauron with the Ring. You could buy a hell of a lot of Goblins and cave trolls with those points that, in general terms, would be less awesome but probably far more nasty. I know that I'd be more inclined to play someone bringing the Balrog at mid-points than someone who just bought 80 Goblins and half a dozen trolls, it would just be more fun (and at that point, wouldn't be about winning or losing, it'd be about whether or not I could bring down a Balrog).
Honestly, there's nothing in LotR that will really make people look down on you for bringing, like there is in 40k. Skewed/spam lists that go all in on one thing can be a pain (all cavalry, all archers ect) but there are counters for them, and even without those the 'power gap' is nowhere near as severe as in 40k.
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