Blacklist/Friends List in general needs an overhaul, starting with being able to unfriend someone and also having it unfriend you on their end. I'm not even gonna start with how the system does nothing to protect those who have been victims of stalking or harassment by people (For example, an ex of mine had a girl he met on FF randomly show up in his town and send a photo of herself there to him) because Square seems to think that the stalkers feelings about being unfriended are important too.

Blacklisting should entirely remove the person's character from your screen and they shouldn't be able to see you.