To be specific, the Gospel of Matthew does not say when Judas killed himself, so it is quite possible that he was alive at that time, though I doubt it.
More to the point, the issue was about apostolic lineage, which is irrelevant to the authority of Christ. The salient point is that the Great Commission is for all disciples, not just those who were at Christs ascension, otherwise, there would be no gospel being preached today.
Forgive me for being so pedestrian about injecting Judas into the discussion, but the argument that priests can trace themselves back to the original 12 is ludacris and similar to the argument the the LDS bishopric uses.
The lineage of the Catholic Priesthood back to the original twelve is historical, not ludicrous.