That's what I got from it, too -- he absolutely knew before Judith said anything that Alfred was Athelstan's, but she had to be the one to admit it and say it out loud. I'm sure he had that whole 'revelation' planned in advance, that once she fessed up to who Alfred's father really is, he would act all surprised and shocked and then deliver his little speech about how Athelstan is a holy man, this is the work of a higher power, etc. Ecbert is always up to something. I'm not quite sure what he's up to vis-a-vis Judith and Alfred yet, but something.
As an aside, my mom (who also watches the show) can never remember Athelstan's name, exactly, and has taken to calling him Applestand. It amuses me greatly.