After a bit of searching on the Japanese internet, I found an explanation that makes so much sense that it almost must be right. That said, I haven't found official material to back this up,1 so this may yet be incorrect.
Here's the deal: "Tetsudou", written 鉄道, means "railway". "Poppo" (ぽっぽ) is a childish/onomatopoetic word for a steam train (see e.g. the zokugo-dict entry, usage 3 [in Japanese]). So I suppose what would have happened is that the kids would've gone along some sort of chain of word associations and ended up deciding to call the guy "Poppo" because that's related to "Tetsudou".
1 Then again, there may not even be any official material to support this explanation - I think this joke/whatever would be very transparent to people brought up in Japan and so this connection would probably go without saying.