The Dream Wraith had given Ryu a great deal of information about what he was dealing with, so he had a fairly good idea about quite a number of things.
Fiends were precisely like these three youths before him. Their cultivation methods were heavily focused on the elements and it could be said that their strength could directly scale depending on the environment. And, even when the environment wasn't in their favor, the best of them were capable of terraforming the world to mold to their desired reality.
However, there were still levels to which this could be. For example, Niuran's method of terraforming was the absolute crudest. He had drawn a trench from this location to the nearest river, and that was not only something that couldn't always be done, it used up a lot of energy.