Is this a sarcastic answer to "good to see you"?

It depends on the context. It certainly can be used sarcastically, in effect saying "I know you're glad to see me, but I'm not glad to see you." But it could also be used humorously to give an unexpected answer instead of the usual scripted response. For example, the casual greeting "What's up?" is usually answered somewhere along the lines of "Nothing" or "Not much," but to be humorous some might answer the question literally by saying "The sky" or "Birds" or something similar.

Note that part of human interaction is not just that one is a participant, but also that one is an acknowledged participant.

It might be considered sarcastic, but written text is tone deaf, so the literal interpretation stands as the respondent being genuinely pleased to be acknowledged by the initiating party. Further adding to the statement is an implied "it's great to be here/alive/healthy/in your presence". Considering the alternatives to any of those, it would not be considered sarcastic to say the original response.

As the Mom of a recovering drug addict, I've heard this response many times in the NA, AA circle. I take it as a sort of 'inside' comment that, there have been so many overdoses and deaths among the addiction community that, indeed, "It's good to be seen ". The alternative being to never be seen again.