Their traditions became more important than what God said through Moses. The Pharisees were meticulous in keeping the law of God especially around other people. Jesus used them as an example of righteousness. The righteousness Jesus is speaking of is from the inside, a heart change. Something the Pharisees lacked since It can only be apprehended by faith.
Faith is superior than all the law keeping.
True faith will produce the works that are required but it must come from inside not just the outside. For you cleanse the outside of the cup and dish, but inside they are full of extortion and self-indulgence. They looked right from the outside on everyone else but Jesus knew what was inside. This is how our righteousness must exceed theirs by having Christ's righteousness not by our works alone but by faith foremost of all. Christ clearly explains the fundamental principle of His own interpretation of the Law .