This is one of the most interesting flavor tags, isn't it? The way I always read it was that it was not done intentionally but was a side effect of some massive counter-strike against the ghols. To me it suggested both the incredible courage and outstanding recklessness of dwarves--the same thing I got from the "certain kind of maniac" flavor for the dwarf mortars. It makes me think of an episode of... er... Red Dwarf (no pun intended) where Lister, having had his fear sucked out by the polymorph, decides to go kill the thing: "Just strap a nuclear bomb to me forehead and I'll go down there and headbutt it into oblivion!"
A couple of other thoughts on this:
A long time ago somebody (my apologies to the author but my memory for names is awful) suggested that this barbican was the entrance to a very large cavern and that the trapped dwarves didn't die--they were just sealed off under a giant plug of rock to keep the ghols from getting in.
Also, I can't remember the exact way the flavor was worded: is it possible that "thousands of their number" or whatever actually refers to crushed ghols, not dwarves? SiliconDream is back--maybe he could give us a grammatical analysis.
Oh, and a question--anybody with Gurps want to tell us about the later history of Stoneheim? One imagines the dwarves rebuilt within the year after Balor's defeat but I don't remember seeing any evidence for this fact. Were there any survivors? It seems to me that the dwarven population must be seriously depleted after all these horrible losses.