Well of COURSE he was being, if not sarcastic, then challenging. What credible cosmologist or astrophysicist dares speculate about the events (if such a word could apply) that preceded the Big Bang? Naturally, none -- since science can't go there. The mathematics does not allow it.
What then to do? Hawking's quip points out that a belief in God grants one the ability to not only ask the unanswerable question "What came before?", but to propose an answer, albeit an unscientific one.
The fact that the answer ("God") is essentially untestable and unfalsifiable makes it unacceptable science. But that's the point. Science stops at the Big Bang like a fly against a brick wall. If one chooses to do so, one can then consider the possibility that God is on the "other side" of that wall (yes I realize that metaphor is untenable).
Given the opportunity, I would ask Hawking whether he personally believes in God as a Prime Mover. If you know of any statement of his on that topic, I'd be appreciative of a link.