Erikson (1954)'s summary of the issues here is convincing:

Irma proves, first of all, to be the representative of a series of women patients. Freud remembers a number of young women in connection with the question whether or not they were willing to accept their therapist's "solution." Besides Irma, who we now hear is a rosy young widow, a governess comes to memory, also of youthful beauty, who had resisted an examination because she wanted to hide her false teeth. The dreamer remembers that it had been this governess about whom he had had the angry thoughts (which in the dream he expresses in regard to Irma), namely, "Sie hat es doch nicht nötig" (incorrectly translated as, "She does not need them"). This trend of association establishes an analogy between women patients who will not accept solutions, who will not yield to examinations, and who will not submit to advances, although their status promises an easy yielding: young widows, young governesses. Fifty years ago as well as today, suspicions concerning young women patients and especially "merry widows" found their way into medical wit, rumor, and scandal. They were accentuated at the time by the common but not officially admitted knowledge that the large contingent of hysterical women was starved for sexual adventure. On the sly it was suggested that the doctor might as well remove their inhibitions by deeds as well as words. It was Freud who established the fact that the hysterical patient transfers to the doctor by no means a simply sexual wish, but rather an unconscious conflict between an infantile wish and an infantile inhibition. Medical ethics aside, neither satisfaction nor cure could ensue from a sexual consummation of the transference.

The dream "Irma," therefore, is revealed to be a condensed version of an array of women by whom Freud has been attracted, about whose sexual history he might have had reason to speculate, and/or by whom he might have imagined himself reproached for one thing or another.

Erikson, E.H. (1954). The dream specimen of psychoanalysis. In Knight, R., & Friedman, C.R. (Eds.). Psychoanalytic psychiatry and psychology: Clinical and theoretical papers. Austen Riggs Center, Vol. 1. New York: International Universities Press. pp. 131-170. (excerpt)