Was Sharknado planned as a trash movie?

Impossible to prove: but almost definitely.

There is actually a precedent for this in cinema, known as 'The Castle Rock Rule'... despite the well circulated platitude that "No one sets out to make a bad Movie", Castle Rock Entertainment supposedly circulated a theory amongst their development squad that this was not actually the case.

Supposedly, there are four types of movies; good ones that work, bad ones that work, good ones that don't work and bad ones that don't work.

Allegedly, a film-maker at Castle Rock could set out to make a deliberately bad movie as long as it 'has legs'... but the risks are obviously bigger, as making a 'bad one that don't work' was a sin that could get you fired, whereas making a 'good one that don't work' was forgivable.

The plot for the film was actually derived from a throwaway line from one of the Directors previous movie Leprechaun's revenge (Later renamed to Red Clover to distance itself from the understandable criticism that it was piggybacking on the Leprechaun series). According to the director, the 'Universes' of the films are joined together by a line spoken by Billy Zane's character...

I had directed a film for the [‘Sharknado'] production company last fall, and when this came up, they wanted me for it. Syfy said, cool. And it’s also [that] the ‘Sharknado’ title had been around for a while. I had made reference to it in a script that I wrote for a Syfy movie last year, called "Leprechaun’s Revenge," so there’s some line in there like, "It’s nothing like that sharknado that hit this town over there. They’ve never been able to live it down," it’s something like that. It kind of stuck and everybody wanted to do something with it.

As many sources exposed, The Sci-fi Channel 'overhauled' its content amidst a re-brand to SyFy, and have since produced consistently trashy micro-budget material.

By their own admission, the creative processes isn't held in the highest regard...

“The phrase we use internally is ‘ridiculously entertaining,’” says Vitale. “We have fun brainstorming sessions, I can tell you that.” In those sessions, Syfy movies are usually conceived title first, plot second. How else do you come up with something called Sharknado? There’s also Mansquito (a man who turns into a mosquito), Piranhaconda (a half-piranha, half-anaconda snake), and Sharktopus (a shark that’s—OK, you get the idea). “The Sharktopus one came from a woman who works in the promo department,” says Vitale. “She said, ‘Hey, you guys make a movie called Sharktopus’ and we went, ‘Um, OK.’”

It is (was) a clever move to acknowledge and appropriate the trash cinema heritage created by Troma Films (amongst others) in the late 80's/early 90's but the contrast is stark between people who have watched both 'eras'...

Early trash cinema was ballasted by an authentic grass roots movement against censorship (and often budget) to create inventive means to produce their content, and the entire movement was spearheaded by the legendary Roger Corman: by comparison, SyFy movies are largely considered insincere cash-ins.

As Cracked have observed, SyFy is heading towards implosion if they continue on this trajectory...

Most of Syfy's schedule is their own original programming now. Most of it sucks. But it's theirs- it's their own crappy stuff which means they have to pay nobody but themselves for it. Many of their original movies don't even bother with writers. They'll replay the cheapest movies and shows they bother to shell out the money for the rights to over and over again, and do their best to turn a profit with minimum effort and investment for maximum gain.

There is still genuine Independent trash cinema out there for its fans, and I'd heartily recommend the films of Astron-6 as a more sincere approach to replicate the movement...

In addition to John's answer referring to the SyFy-Channel, also take a look at the production firm of the movie: The Asylum.

They are specialized in Mockbusters, and cheap, quick productions, so good luck getting a serious movie from them.

Sharknado does give the impression of being deliberately terrible even for their standards, though, in my opinion.

PS: But some of their movies sure are fun!