It was outright stated that Iroh has always been Ozai's superior, and they even asked Iroh to kill him, and the only reason he refused was because Ozai is his brother. That's Iroh when he's out of shape. If Iroh was training, he could probably put up a great fight against avatar state Aang, considering his raw strength alone without bending allowed him to one-hit several of the best fire nation guards who all had weapons, and break thick steel bars like the were plastic sporks.
Aang was getting stomped by the fire lord until he went avatar state. Iroh could shit stomp Aang with the comet, and still beat him solidly without it.