The Story of Steel

In the early times, the formerly nomadic fire tribes push the earth-manipulators out and settle down into city-states.
At some point after this, an ambitious commoner discovers how fire affinity is inherited. He manages to steal away the corpse of a noble, replacing it with a double before the funeral. In consuming this corpse, he gains a minor affinity for fire.
With this affinity, he's able to wear heavier armor (of the time's barely worked iron, all the better for nobles to cut through like butter with Embergilt) and exert himself far more without overheating. He forms a relatively successful mercenary band, generally working in the service of Midland cities to kill bandits and such, gaining trust. The inner circle of this mercenary band is let in on the secret, and they all gain lesser fire affinities, one by one.
A few years into their success, the original founder, along with some older higher ups, find their affinity extremely well-suited to metalworking. There was no need for heavy protective clothing, and heat flow could be somewhat regulated through elemental manipulation. The company's arms and armor rapidly improve in quality. Their iron improves in uniformity and chemical composition until becoming true steel. Within a few decades, the mercenary company develops an alloy that outdoes baseline embergilt, and heavily outclasses the standard equipment of mundane soldiers- a huge blow to the strength of nobility.
So then the nobility's on the back foot: this one group of mercenaries is essentially as strong as any one of their city-states, being more well-equipped man for man. While a noble could still destroy any of them with a stream of fire (barring the fire-resistant high command), their soldiers are less effective; gold is too expensive to give to every infantryman. The mercenaries' near-monopoly on steel is a huge force multiplier. Though most of the cities would've figured out the metallurgy behind it a decade or two (given the samples they recover from battlefields and such), there ended up not being any need.
Fast forward a decade or so, and the original leader (along with several high command) dies. Some theorize that he actually faked his death in order to retire peacefully, but that is neither here nor there. The band splinters without their oversight. Some go to the cities, bringing the secrets behind steel with them. Instead of being rewarded, they're executed. They essentially just admitted to corpse theft, after all. But now some noble families have knowledge of steel, and it spreads. The remaining bands throw in with cities that didn't get these secrets, but keep their distance, mindful of what happened to their former comrades. They end up giving away the steel recipe for almost nothing just to create goodwill and keep their employers alive.
Steel armor becomes widespread- steel itself gradually becomes recognized as one of the great mediums for 'high art'- formerly consisting of glass, gold, and marble. In less than a generation, 'gold' becomes 'metal' in the Midlands' public perception of art. Iron was formerly considered brittle, weak, and ugly, but the new working methods elevate it massively.
Eventually, some rebellious noble children join up with the remaining steel-clad bands, intent on making names for themselves. They begin a trend that ends up lasting centuries. Over a generation, the bands go from supposed corpse-thieves to nobility. Hundreds of years later, these origins have been mostly obfuscated by time, and deliberately covered up when necessary. The orders become the backbone of any coordinated defense against foreign incursions, famed as the Midlands' elite units. At the same time, they often follow the path of their original founders in acting as mercenaries in inter-city conflicts, but in a much more pompous and "honorable" fashion.
Before the armistice brought about by Amaryllis' death, it was her and the knightly orders which held Eidel at bay, preventing them from taking land past the The Webthicket.

Later revisions

The tale gained a lot more mainstream acceptance as time went on and fire affinity diffused throughout the populace. For much of the Midlands' history, it was a commoner's folk tale, told in relatively hushed tones due to its origins in the most taboo act one could commit- cannibalism.
Most later versions of the story just have the founder as an estranged and/or orphaned noble, and not a cannibal. The second generation, some of whom attempt to sell the secret of steel etc. are his children. This makes it obvious that the explanation was a coverup in retrospect, seeing as affinity inheritance is matrilineal. Commoners wouldn't know this, though those who originally came up with the story probably did and warned others not to speak of it in noble company (hence the later stigma against referencing the story in polite company). By the time the story hit the mainstream, it'd been so entrenched that despite the glaring logical error, that's the version that people remember (aided in part by the knightly orders themselves attempting to perpetuate this myth and cover up their unsightly origins).
This isn't entirely unrealistic, according to some historians. After all, corpse cannibalism causes the devourer to contract Laughing Madness unless they themselves are also a fire-blood. Due to the long-term decision making exhibited by the original band leader, it's a commonly accepted theory that they were a bastard born from a noble father. After all, a true commoner would never make such conservative strategic decisions for over a decade once afflicted with the madness. A narrative pushed by anti-fire movements says that the man did go mad, but was wise enough to delegate strategic responsibility to the still-sane while he focused his lunacy into the creation of steel. It's also possible that the man was simply very lucky and did not contract the disease at all.