With the looming threat of Pirate Ship, Steward starts to look a lot better to me than Masquerade, since you can trash your starting cards faster early, and play it for coin later (since there are plenty of Villages). There are a lot of engines that deal best with Pirate Ship by just ignoring it (I played Hunting Party + Horse Traders earlier today and found that Pirate Ship really can't compete, unless it gets a lucky hit on your Gold or can be played an awful lot of times), but I think most BM+Xs really struggle - keep in mind that whenever the Pirate Ship fails its attack, it's very likely to cycle your X without you playing it. Engines are more resilient because there are more Xs around (which also helps protect your high-value Treasures).
Also I'd really really strongly consider going Duchy/Duke here. Getting to 5 is not so hard. He has trouble getting the Pirate Ships really fired up if you trash aggressively with Steward, while you still have terminal Silvers and maybe a couple actual Silver or Gold shielded by green.
Basically, I vote to open Ironworks/Steward, using the Ironworks to pick up a bunch of Villages (well, probably Silver sometimes too) and later some more Stewards for money and/or draw, with a Duchy/Duke plan. Now Pirate Ships are dead in the water (ahem) and you have a plan that would make sense anyway. (You want to build a surplus of Villages with Ironworks IMO because that *also* gives some shielding against Masq.)
Of course, he didn't tip his hand WRT the Pirate Ship strategy until turn 2, but...