Is this referencing something dresdenverse specific or are you discussing a common legend. If it's the latter (as I suspect it is) it may not be relevant. Remember in the third book Lea reacts very negatively to the concept of Harry leaving Iron in the Faerie parts of the Nevernever. Seems to me that things like that would be ridiculous if common faeries were running around with iron all the time.
Real world myth. Also, don't forget "Harry Is An Inconsistant Narrator" and "Fae Lie" when your discussing what Lea likes or dislikes. Lea might not like it (and Fae in general might agree) but that doesn't mean it's a toxic substance that will damage the Nevernever.
The Dewdrop fairies end up running about with stainless steel cutters without ill affect. Cold Iron may not be the "end all be all" to all Fae. It might only affect the Lords and Ladies, the higher up muckety mucks... you know anyone likely to have Toughness powers with a Catch.
Cold Iron doesn't cause anymore damage to Joe Normal Fae than anything else, it just acts as a penetrator to "armored up" Fae, those with Toughness Powers.
Plus, an entity like the erlking will be offended, if you don't bring weapons, and bringing iron would just mean you are coming prepared, so he would probably be both, offended and impressed.
I doubt the Erlking would be offended if one came Ironclad before him. He would expect one to come as prepared as possible.
In fact, he might be offended if you came without Iron if you are reputed by always go about armed with it.
