I was a little taken aback as well, but not so much because it was that difficult, but because I wasn't expecting it. As far as I was concerned I was just waltzing in to good 'ol Shandra's place with couple of slack jawed jokers like the Grobster. Imagine my surprise when a mini-horde of Baatezu showed up at the doorstep.
But all things considered, the Double Dragon fight was hands down the toughest fight in the game in terms of sheer opposition power. Of course, if you had absolutely no clue as to what was going on in terms of strategy, then the final fight would probably be a contender as well.