Why is Judas' betrayal worse then Peter's denial? I mean, in Dante's Inferno Judas is in the deepest circle of hell and Peter of course the cornerstone of our church.....
Intrinsically, I don't know that it is. I think you're right on that supposition. I mean, the anger is still probably there in the New Testament, that these guys still (rightly) blame Judas for betraying their mutual friend and teacher, and hold that against him. At least one of the gospel writers attributes his actions as stemming from demon possession, which you would think might excuse him somewhat, though perhaps one has to give themselves over to a demon, and thus can and ought to be held responsible for whatever happens as a consequence, in the way that the addict no long has much functioning will left in the matter, but did when he started down that road. And one of the writers says that Judas stole from the groups' common purse, which he kept as their money-manager, thus saying that this guy was a rogue from the beginning.
Ultimately, though, I think in a way it simply comes down to whether Judas and Peter actually had faith in Jesus as the Christ. Peter did, and repented and asked forgiveness, giving himself over to the Risen Christ, when that great event happened a few days later. Judas, it seems, did not, and thus killed himself. That may have been out of a genuine remorse: I can look at the events surrounding Judas and understand his logic in the betrayal and what happened afterward, but he didn't look to the possibility of forgiveness, maybe effectively denied it, and thus ended his own story without looking for the miracle and possibilities of grace.
Yes, I wonder about Dante's emphasis. Is Judas the worst of the worst? Even for his betrayal of Christ? I doubt it. I'm sure that under the right circumstances, I'd hand Jesus over to be crucified, too. Indeed, the theology of the New Testament and our liturgy insists on that point: he was crucified because of our sins, our violations. Dante in his sci-fi trilogy reserved the lowest circle of hell for the betrayers. And look who else was there: Brutus, betrayer of Caesar. Yet if you look to Shakespeare's play Julius Caesar, Brutus' betrayal is portrayed as an act of sad, regretful heroism, where Brutus puts the good of the Republic ahead of even his own friend's life. So there have certainly been a variety of "rankings" of evil, even among great Christian artists and authors like Dante and Shakespeare. Theology tends not to rank evils or punishments in so confident a way, and maintains more of a modest silence on such things, at least in the better theology over the centuries.
But there is at least an agreement that Judas done wrong, even if it was that very betrayal that was turned into part of the mechanism of redemption. Modern artists have been somewhat more cautious with their condemnation of Judas in this way. Thus you have Judas protesting his treatment in Jesus Christ Superstar on exactly this point, that what he did was necessary to the story of redemption as we have it. In contemporary Irish poetry, Brendan Kennelly's The Book of Judas proceeds from his perspective in trying to comment upon what happened (as well as much more on betrayal in general), and it is in that vein that Bono in U2's song "Until The End of the World" from the masterpiece Achtung Baby sings the piece entirely from Judas' perspective. There is no simple excusing of Judas, I suppose, in the end by these artists, but there's also perhaps a recognition that he's not that remarkable, and is perhaps as sad a symbol for humanity as any other of our lesser lights.