Why does diamond have lower tensile strength than Iron?

Strength of materials is affected by defects. A perfect crystal of iron would be extremely strong. Once a crack starts, it is not so hard to make it advance one atom deeper. Think of tearing open a plastic bag. Much easier once the tear starts.

Brittle materials can be easier to break because they stretch less. It is easier to tear a sheet of paper than a sheet of rubber. Rubber stretches so the force is distributed through a large region. In paper, it is all at a small region near the tip of the tear. A small region has a smaller cross sectional area. The stress is larger for the same force.

Actually the data presented by You show that iron/steel is more brittle than diamond. Precise tensile strength of diamond is unknown, however values of up to 60000 MPa have been observed. Typical values of tensile strength of iron/steel varies from 100 to 11000 MPa. Therefore diamond can withstand more than iron/steel.

The data you quote shows that diamond is stronger than steel, but strength isn't the same as brittleness (or, indeed, stiffness). Brittleness is to do with how much energy is needed to break something, and takes into account the amount of deformation it can take as well as its strength. Steel can deform a lot before it breaks, diamond can't and so diamond is more brittle than steel but much stronger.