それ means “it” which is indicating the Dragon Slayer, the weapon that Guts is using.
The particle は is used to indicate the topic of the sentence which is the Dragon Slayer.
The predicate of the sentence is 剣というにはあまりに大きすぎた. There is the grammar “A には B すぎる” meaning “too B to do A”. The A ends with a verb dictionary form and the B ends with the stem of an adjective, and すぎた is just the past tense of すぎる.
Now let’s look at the A part “剣という”.
剣 means “a sword”.
The quotation particle と and the verb いう means “to be called” so 剣という means “to be called a sword”.
And the B part consists of あまりに and the stem of the adjective 大きい.
あまりに is used to emphasise the following adjective, meaning “so much” or “way too much”.
The adjective 大きい means “big” so あまりに大きすぎた means ”was far too big”.
So 剣というにはあまりに大きすぎた means “was far too big to be called a sword”.