Is the Sentry more powerful than Iron Man. You betcha.
But Shellhead still makes a pretty good showing of it; impressing Sentry with his speed, getting in a few good hits and finally, at least temporarily taking the Sentry out of action through an indirect appraoch.
Is it self-serving for the story? You betcha, but it isn't way out of the realm of believability. Despite possessing "the power of a million exploding suns" the Sentry has more than a couple of marbles loose and Tony is just the man to exploit this. Much like a certain DC dark night detective, with time to properly prepare, there are few opponents Iron Man can't deal with successfully.