Jesus said to them, "I watched Satan fall from heaven like a flash of lightning.

Satan falls to earth and there is now enmity between the serpent and the woman (Genesis 3.15).  Satan, who was chief of the angels, is now at war with the Virgin Mary, who is Queen of the Angels (Revelation 12.1).  Satan's pride is being crushed by Mary's humility.  Of Satan is written:

How you are fallen from heaven,
   O Day Star, son of Dawn!
How you are cut down to the ground,
   you who laid the nations low!
You said in your heart,
   ‘I will ascend to heaven;
I will raise my throne
   above the stars of God;
I will sit on the mount of assembly
   on the heights of Zaphon;
I will ascend to the tops of the clouds,
   I will make myself like the Most High.’ (Isaiah 14.12-15)

while Mary humbly rejoiced in God, saying:

Mary said, "My soul magnifies the Lord,

and my spirit rejoices in God my Savior,

for he has looked with favor on the lowliness of his servant.

Surely, from now on all generations will call me blessed...

God has shown strength with his arm;

he has scattered the proud in the thoughts of their hearts.

He has brought down the powerful from their thrones,

and lifted up the lowly. (Luke 1.46-48; 51-52)

The believers who obey God were forever united with Mary as their spiritual leader by Jesus before his death on the cross (John 19.26-27).  Michael, who is one of the chief princes of the angels (Daniel 10.13; 12.1) and the angels with him cast the devil and his angels down to earth (Revelation 12.7-9).  They're now at war with Mary as well as us, her children (Revelation 12.17).

Why was Satan cast down to earth where he could tempt man?  According to legend there was an initial test for the angels, to allow them to exercise their free will before entering into the fullness of the Beatific Vision.  It was also shown to them that they would be required to worship a man -- Jesus.  Satan grew envious of God's superior attributes and became too proud to worship his Incarnate Son.  He refused to obey and serve and so was cast out.  We may speculate that he was thrown down to earth to be the agent of mans testing, since man is lower than the angels his assistance and his temptations come through their activity.  See the reflection on Wisdom 2.24 for more on how Satan's envy brought death to earth.