Was it proper to say that they came from afar?
Rashi citing Bamidbar Rabah 20:6: No. He was one of three that Hashem tested, and he failed. He should have said 'you are Hashem's Navi, and you ask me?!' Also Hevel and Bil'am (Bereishis Rabah 19:11 adds also Adam ha'Rishon) should have said, 'Hashem, You know everything!' (Hashem asked them "where is Hevel your brother", "who are these men", and "where are you.")
Malbim: Yeshayah asked where they were from, to hint that one should not show his wealth to neighboring countries, lest this arouse them to make war to take the wealth. Chizkiyah said that they are from afar; Bavel has never come to Eretz Yisrael, so I did not think that there is concern lest they come to make war.
Why did Chizkiyah not answer what they said?
Malbim: He understood the rebuke, and was ashamed to answer this. (Really, they said that they came to investigate the wonder; Chizkiyah treated them as if they came for his honor.)
QUESTIONS ON RASHI
Rashi writes that Chizkiyah failed the test. He should have said 'you are Hashem's Navi, and you ask me?!' Nevi'im do not get Nevu'ah at all times! If Yeshayah asked, this implies that Hashem did not tell him!
Imrei Yosher (on Bamidbar Rabah 20:6): Based on Chizkiyah's level, this is considered a sin.
Etz Yosef citing Nezer ha'Kodesh (on Bamidbar Rabah 20:6): He should have realized that Yeshayah is merely opening the dialogue 1 , and should have said 'what word of Hashem do you have?'
Great Nevi'im asked because they did not know! Moshe asked Aharon "what did this nation do to you [that you made the Egel]" (Shemos 32:21), and Elisha asked the widow "what do you have in the house" (Melachim II, 4:12. However, there he said "tell me"! - PF)
