It is an effort to stir up hatred towards Cruz.
The first leg of Cruz's strategy, winning in the South, was unsuccessful in the states east of Texas and Oklahoma. Despite his evangelical background, he seems to do better with Lutheran, Reformed, and charismatic voters than with Baptists and independent Christian church members. This accounts in part for his victories in Iowa and Wisconsin, and his losses in the Southern states.
I don't think Cruz expected to bother with New York in the first place, so his "New York values" remark was the sort of statement he did not think would bite back. He has two bad days ahead: April 19, when New York votes, then April 26, when the five other Northeastern states vote. Were I one of his advisers, I would tell the Texas senator to focus on Nebraska and Indiana, then the Washington and Oregon primaries, in order to change the momentum back for the final Super Tuesday, June 7, when California, New Jersey, Montana, New Mexico, and South Dakota all vote.