It means you don't want to be their friend. If they blacklist you in return, you will become their enemy. If they do nothing, they will be one of the people you are ignoring. If they whitelist you in return, they will be one of your stalkers.
When you blacklist someone, that person will no longer be able to access your Homeworld, and their forum posts will be automatically minimized for you in the main SSW forums. They will also not be able to private message you in SSW chat.