OH OH! Or another idea. What if Iroh is the eldest grandson, but is not eligible for the throne because he is a non-bender! And thus the crown prince/princess is a younger sibling! Ooooo bender/non-bender tension!
Still you would hope being named after the Dragon of West would indicate ‘hardcore-firebending-machine’ but then again most of the time you can’t tell if your kid is a bender until they are like 3-4 years old.