There were certain cities where Jesus had performed many of His miracles. Tragically, the residents of these cities were generally unresponsive to His message. They witnessed many great works from Him--works that proved His teachings were from God. Thus, they were without excuse. They should have believed and repented. The three cities that Jesus specifically named were: Chorazin, Bethsaida, and Capernaum. The Scriptures, up to this point in His ministry, have not recorded Jesus performing any miracles at either Chorazin or Bethsaida. This illustrates the fact that very few of the miracles which Jesus performed were recorded by inspiration (cf. John 20:30,31; 21:25).
In Matthew 11:21, Jesus compared two Jewish cities (Chorazin and Bethsaida) with two heathen cities (Tyre and Sidon). He then affirmed that had these heathen cities witnessed the power of God as they had, "they would have repented long ago." This comparison would have been a shocker to His listeners, but certainly Jesus, who knew the hearts of men, was able to make such a judgment (cf. John 2:24,25).
What does it mean to repent "in sackcloth and ashes"? This has reference to the practice of taking off one's soft, expensive garments and putting on sackcloth and ashes to express sorrow for sin. Sackcloth was a course fabric woven of goat or camel's hair, and it was worn by those who mourned (and by those who were poor). It was called sackcloth because it was strong and durable and used to make large sacks for carrying things. Ashes were often put upon one's head and face as additional symbols of grief. It is unknown if Jesus literally thought that these heathen cities would have manifested repentance physically in this manner, though men of old were sometimes known to do such (cf. Jonah 3:6-8; Job 2:8). At the very least, Jesus used this phrase to indicate that these cities would have repented thoroughly.
In Matthew 11:22, Jesus affirmed that the judgment of Tyre and Sidon would be "more tolerable" than that of Chorazin and Bethsaida. Our Lord did not say that the judgment of Tyre and Sidon would be a pleasant one, but it would be better than that of Chorazin and Bethsaida. This is the case because God takes one's opportunities (and abilities) into account when He judges (cf. Luke 12:47,48). If one lives in sin without knowing God's will, he will be punished in the judgment. However, it will be even worse for the one who lives in sin and knows to do better (cf. II Pet. 2:20-22)!
An important lesson to glean from this passage is that one may do his best to teach people the gospel, yet they may still refuse to repent. In such cases, the preacher is not at fault; the blame should be placed on the people, which is exactly where Jesus placed it. It wasn't Jesus' fault that many who witnessed His miraculous works and heard Him teach the truth were hard-hearted and impenitent. Likewise, it isn't our fault today when we are unable to stir the stubbornly rebellious to repentance.
Jesus continued the same line of thought in Matthew 11:23,24 and applied it to Capernaum. They were "exalted to heaven" in the sense that they were proud and boastful. Not only did Jesus dwell there for a time, but many miracles were performed within its borders (Luke 4:23). Its inhabitants had opportunity to hear much of the teachings of Jesus, yet they had not repented and did not accept Jesus as the Messiah. As a result, they would be "brought down to Hades". Hades is the abode of the dead (specifically, the departed spirits). Jesus is merely saying that Capernaum will be brought to utter ruin when judgment comes.
Jesus then points out that Sodom's destruction was not the result of natural law but of divine punishment for sin (cf. Gen. 19:24; Eze. 16:48-50). It was a punishment that would have been avoided by repentance (cf. Jonah 3:10). Let it be realized that there is hope for all individuals (and nations) who genuinely repent, no matter what transgressions they have committed (cf. II Pet. 3:9). But, the impenitent have no hope whatsoever (Luke 13:3).