When the Nephites had been righteous, they were “white and delightsome.” They had become “dark and loathsome” through their refusal to obey the commandments. It was for that previous generation, and the lost opportunities of the current generation, that Mormon laments. They could have been among the fair ones, but “have rejected that Jesus, who stood with open arms to receive [them].”
An intriguing possibility is that the name Nephi also meant “good, fair.” Thus, this repetition of “O ye fair ones” may have been a more literary play on the meaning behind the term Nephite.