Iroh isn't used to dealing with things that are neither human nor spirit; even beings like dragons have a (clawed) foot in the spirit realm.

"Work around it; we cannot get into the Palace, but we can control who comes out of it."

Firebenders are not known for indirect approaches, but Iroh has studied all four nations, and sometimes more subtle methods were necessary. Overwhelming force wasn't useful against Ancient and Powerful Evils.