Iroh is not a pacifist. He is just very selective about the use of deadly force.

Iroh tries to teach zuko how to kill his enemies unflinchingly with "cold-blooded" lightning, and when that fails, teaches zuko to redirect lightning, which he knows is, and makes clear to be, explicitly deadly force, "to turn your enemy's energy against them". He acknowledges that, if he were to defeat Ozai, it would be "brother killing a brother", because there was no realistic world in which Ozai could be contained without leading to his death. He accepts that his granddaughter "is crazy and needs to go down".

When he chooses to take back Ba Sing Se, does he go in covertly and retake the puppet state from the occupying troops by forcing a surrender or a diplomatic solution? No, his opening move is to generate the largest ball of fire possible, then hurl it at the titanic wall, which not only does the camera show us has many people behind it, but which Iroh is ready to obliterate, soldiers and all, sight unseen. He does what must be done. Violence is his last resort, but he clearly has no moral compunction against using violence against the violent. Deadly force is met with a redirecting blow, carrying that same energy or more. In the first season, when he believes the fate of the world hangs in the balance, he threatens and uses deadly force "tenfold" that which is exacted upon the moon spirit. There is nowhere in the show that Iroh says that death is never the solution. The only reason we don't see the deaths of the many soldiers occupying Ba Sing Se at Iroh's hands (as well as all of the other times he has caused soldiers to be buried under their own boulders, breathed fire into their faces, or otherwise used violent infernos to defeat enemies) is that it was depicted in a kids' show. The only person in the series who maintains that deadly force is never the answer is Aang. Aang only manages it in the finale by Deus Ex Machina because he's the chosen one (and the protagonist of a kids' show).