Matthew 26:24 The Son of man goeth as it is written of him: but woe unto that man by whom the Son of man is betrayed! it had been good for that man if he had not been born. (parallel Mark 14:21)
Was it cruel of God to create people who He knew would be condemned?
Of course, as we might expect, it wasn't meant to be literal, as though there were some objective weighing of Judas' life proving things would have been better had he not been born. Keener's Matthew commentary [626] notes that cursing one's own birth, or that of others, was a common metaphorical lament used for or by someone experiencing great distress or woe, both in Jewish and pagan literature (see for example Job 3:3-26). There is even a rabbinic saying that anyone whose first words upon waking are not from the Torah is better off not having been born.
Obviously this concept had the status of a metaphor to indicate the experience of something tragic or awful, or else to pronounce judgment. Even to this day we use the same metaphor; Napoleon reportedly said, for example, "Better not to have been born than to live without glory."
A few related answers to note are Miller's series here; see especially this part, and our article here.
-JPH