I like Chizkuni's analysis:
כי בדבר אשר זדו עליהם; Yitro explains what had prompted him to say that he now realises that the G-d of the Israelites is greater than any other deity. The reason is that when analysing the method by which G-d imposes penalties on the sinners, it becomes evident that the punishment matches the sin committed. The Egyptians’ crime had been that they drowned the Jewish babies; they had been punished by being drowned themselves. In Nechemya, chapter 9, where when a celebration of the Sukkot festival, after a Day of Atonement on which the people confessed their collective sin in Jerusalem is described in detail, the author also describes the greatness of G-d as being reflected in the manner in which punishment matches the sins committed. (verse 10)(Sefaria translation)
So we see according to Chizkuni, it was a theological realisation about how G-d punishes those that sin, and how it was abundantly clear that the punishment is calculated to the precise level required. It wasn't just a case of middah knegged middah per se, it was a retribution that was equal to the crime.
This point is brought out equally so by the Ohr HaChaim HaKadosh:
עתה ידעתי כי גדול ה׳ מכל האלוקים, "Now I know that the Lord is greater than all gods;" Yitro acknowledged that although all other nations have spiritual representatives in the celestial regions, some of whom are very powerful and both protect their protegees and assist them in their wars, they do not exact retribution from the adversaries of their protegees as does G'd. Only G'd operates on the principle of the punishment fitting the crime. Only the G'd of Israel would drown people who themselves had drowned others, etc. When the celestial representatives of other nations act in defense of their protegees one cannot recognise this as what happens to their adversaries seems totally unrelated to what these people had perpetrated. In the case of the G'd of Israel, every one of the plagues He brought upon Egypt was retribution for a specific wrong committed by that people and their king. (Sefaria translation).
Alternatively, if this does not satisfy you. There are other views that point out that he was impressed about other occurrences and not just krias yam suf.
The Gemara in Zevachim 116a writes:
כתנאי (שמות יח, א) וישמע יתרו כהן מדין מה שמועה שמע ובא ונתגייר ר' יהושע אומר מלחמת עמלק שמע שהרי כתיב בצדו (שמות יז, יג) ויחלש יהושע את עמלק ואת עמו לפי חרבר"א המודעי אומר מתן תורה שמע [ובא] שכשניתנה תורה לישראל היה קולו הולך מסוף העולם ועד סופו וכל [מלכי] עובדי כוכבים אחזתן רעדה בהיכליהן ואמרו שירה שנאמר (תהלים כט, ט) ובהיכלו כולו אומר כבוד
The Gemara notes that the disagreement between amora’im with regard to when Yitro came to Mount Sinai is like a dispute between tanna’im: The Torah states with regard to Yitro, before he came to Mount Sinai: “Now Yitro, the priest of Midian, Moses’ father-in-law, heard of all that God had done for Moses, and for Israel His people, how the Lord had brought Israel out of Egypt” (Exodus 18:1). What tiding did he hear that he came and converted? Rabbi Yehoshua says: He heard about the war with Amalek, as it is written adjacent to the verses that state that Yitro came: “And Joshua weakened Amalek and his people with the edge of the sword” (Exodus 17:13). Rabbi Elazar HaModa’i says: He heard about the giving of the Torah and came. As when the Torah was given to the Jewish people, the voice of the Holy One, Blessed be He, went from one end of the world to the other end, and all of the kings of the nations of the world were overcome with trembling in their palaces and recited a song of praise, as it is stated: “The voice of the Lord makes the hinds to calve…and in his palace all say: Glory” (Psalms 29:9), i.e., each king in his own palace recited songs of praise to God. (Sefaria translation and notation)
So he heard about the war of Amalek and the giving of the Torah which also made a big impression. The former is also brought in the Midrash in Shemos Rabbah 27:6 which notes that when Yisro saw that Hashem had destroyed Amalek he regretted his idol worship and repented.