i actually didn't know the position could be/is encoded into the transponder signal.
anyway, most airliners will have more than one IRS plus one or more GPS-receivers. furthermore the position calculation can be backed up by automatic radio-nav tuning. in the end u get an "composed position", some kind of average from all the values. and the longer the flight, the more "off" this position will be. as long as there is GPS mixed in, it will be pretty good (about 0.02NM). IRS-only you might expect the 2-3NM you mentioned.