The phrase is a cry for pity on the object elsewhere in the scriptures.
I do think the Greek grammar (not necessarily the word order) points toward Jesus saying ‘better for Judas if Judas had not been born’, but the phrase is used for other people no one thinks is lost forever. My ExCom article on Matt 26:25 and parallels (including at GosMark).
Peter quoting Psalms in condemning Iscariot would be more worrisome to me, if Acts showed that Peter even after Pentacost was always right on the money about God’s intentions for not saving people Peter doesn’t expect to be saved. But there’s a whole chapter on Peter admitting he was wrong about who ought to be evangelized, and that’s after Pentacost, not before. I somewhat doubt that it’s a coincidence that King David is being quite principally inconsistent in those Psalms about expecting God to patiently forgive him for his murderous betrayal but not to save those other traitors over there (who after all are dissing him on the same issue God Himself is judging against David – the betrayal of his great friend and ally Uriah.) The Son of David might be regarded as better than David on this and other matters. My ExCom article on Acts 1:15-26. Also some notes on Psalm 69.
What I regard as decisive is a composite argument about Jesus’ intentions toward Iscariot, and what He expects from His apostles (which on the evidence we have they don’t appear to have followed through with!), from John 13 - 17. Part 1 here, Part 2 here. John 17 is also part of a larger argument stretching back at least as far as John 5 on Jesus’ own goals and intentions on raising those who do the evil things to judgment, and what He expects the results to be eventually. This naturally includes Iscariot. But put shortly, while Jesus lost “the son of perdition” in one way (who was out right that moment betraying Him) so that the scriptures would be fulfilled, Iscariot was still given to Jesus in order for Jesus to give him eonian life, and this shall also be fulfilled. Temporary loss is loss, but it’s also temporary.