This is a yes and no issue. Yes she could get in the EU national line and no, there is no guarantee the agent she got in that line wouldn't question why she was in that line with a US passport, regardless of place of birth. Being born somewhere does not mean you have legal status in that country. For example, what if for some reason she had renounced Irish Citizenship? If she had done that, she would have no legal status in Ireland. The Immigration Agent has no way of knowing her legal status just because her US passport shows Ireland as her place of birth.
Always bear in mind that Immigration Agents are people. They have good days and bad days, get out of bed on the wrong side, have an argument with their spouse,etc. and always have the POWER to take it out on YOU if they choose to do so. Err on the side of caution.
It does however make sense to use her EU passport if she has one. The only rule to remember when travelling with more than one passport is that you should always enter/leave a country on the same passport. So leave US on US passport(actually required by law of all US citizens); enter Ireland on her Irish Passport (there is no such thing as an EU passport); leave Ireland on her Irish Passport; enter US on her US passport.
There are times when having 2 passport does have advantages such as in this case. Another example is where entering on one passport may require a Visa (and paying for one) while entering on another passport may be done on a 'Visa Waiver' (which costs nothing).