I wouldn't think too hard about this one. Yeah - a dealer told us that IS stands for "Invididual Sedan", but what difference does it make?
I like to think of IS300 being
"Inline Six, 3.00 liters displacement".
The RX/LX probably have the "X" from "4X4" (offroad)
I am sure some marketing people ponder these things over and over and probably pick letters based on how they look in print and what psycology studies say about peoples' impressions of certain letters.