Jesus pronouces His final woe upon the hypocritical scribes and Pharisees and reminds them that their actions make them just as guilty as their forefathers who killed or at least mistreated all the prophets He sent to them. He will, in fact, hold them responsible for the deaths of all these prophets, retribution is coming upon them for this and for their soon rejection and murder of Him as well.
In the Bible a generation is roughly forty years. His reference to “this generation” HAS to refer to those with whom He is speaking. He uses the near demonstrative (this). Had He meant a future generation He would have used the far demonstrative (that). Every instance of “this generation” in the Bible refers to the generation being addressed (just as the words would seem to indicate). This did in fact come to pass: Jerusalem was destroyed, and the Temple along with it, in the events surrounding 70AD. There is much fulfilled prophecy in these events – but our ignorance of history (and the Bible) often keeps us from seeing that fact.
Jesus would prefer that Jerusalem (the nation) repent, but He has given them free will. We must remember that along with free will comes the responsibility of its exercise.