As part of Disney and Sony's arrangement to place Spider-Man in the MCU, they share characters. Peter (whose film rights are owned by Sony) was "on loan" to appear in Civil War and Avengers. In exchange for that, Disney-owned MCU characters are "on loan" to Sony for use in their Spider-Man films. It's not so much about replacing Iron Man necessarily, but Sony wants to be able to have someone from the wider MCU in their films. This is also a distinguishing feature of the MCU because Tobey Maguire and Andrew Garfield were not (previously) allowed to play with other superheroes before now. If you're going to put Peter Parker into the MCU, it makes sense that there would be other superheroes there.
That being said, I think that the selection of Doctor Strange to appear in this film was essential because he allows the plot to happen. He and Peter already knew each other from the events of Infinity War, so it makes sense that Peter would go to him for help. Also, once they decided that this movie would be about the multiverse, there aren't that many characters who possess the ability to do that. Certainly no one else who has previously been in direct contact with Peter would be able to do that.
My critique (in specifically mentioning/comparing Downey Jr's Tony Stark) wasn't about that, but about how they actually used Strange... in a way that makes the character very similar to the MCU rendition of Tony Stark, especially in relation to this Peter Parker...
I was fine w/ what they did w/ Tony Stark in general (partly because I didn't really follow Iron Man in the comics), especially since all that long predated the crossover w/ Spiderman, but doing something so similar w/ Strange here was a bit too much for me to overlook -- yeah, part of that is I did follow Strange in the comics (back in the 80's thru early-90's anyway), but also, really, it all just makes him seem too amateurish and reckless for the character/role, which demands a lot more wisdom and gravitas...
RE: the whole multiverse premise/plotting, there was already a (much) better, recent, Spiderman take on that, which actually makes the deficiency here that much more glaring (and unfortunate) IMHO -- that version illustrates and proves there's really no need to use Strange at all, NVM in that rather lame way...
_Man_
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