“Blew”, in this context means he flopped in the trial–as in he clearly lost. His friend didn’t attend the trial and as a result the judge sentenced him to “25 to life” (an indeterminate life sentence). Although Tupac mentions a few lines later that his friend won’t see parole, being sentenced to “25 to life” implies that he’ll be eligible for parole in 25 years time.

“Blew trial” probably does not mean skip. If Pac’s friend skipped out on the trial, he could not be sentenced in absentia. The federal court system requires the defendant to be present during their sentencing. It’s believed Pac means that his friend refused a plea deal and took the case to trial, which was the wrong move because he “blew it” and got a harsher sentence. Also, given Pac’s familiarity with the federal prison system, “25 with an L” may not mean “25 to life” where his friend will be eligible for parole after 25 years. Parole was abolished within the federal prison system for crimes committed after December of 1987, as was indeterminate sentencing. This could be why in the next line he says “Time to do fed time, won’t see parole”.

Pac knows federal convicts don’t ever get parole. Since Pac is reminiscing and his friend is already in prison (“plus with the drama we’re lookin out for your baby’s mama / takin risks while keepin cheap tricks from gettin on her”) it is also possible his friend could have committed the crime before the sentencing laws were changed at the end of 1987, and then was indicted and sentenced more recently. For a federal crime like conspiracy, it often takes several years after a crime is committed for the investigation, prosecution, and trial to conclude. If this happened, because the crime was committed before the laws were changed, he could still be talking about “25 to life” since the old sentencing rules would still apply to his friend.

Talking to his late friend, Pac reminisces to their inseparable youth and growing up in the hood. They grew up in a gang-friendly environment, and eventually started living the street life, which led them both to death.

We used to be like distant cousins
Fightin', playin' dozens, whole neighborhood buzzin'
Knowin' that we wasn’t
Used to catch us on the roof or behind the stairs
I’m gettin' blitzed and I reminisce on all the times we shared

In Ja Rule’s song “Loose Change”, a diss track aimed mostly at Em, Dr. Dre and 50 Cent, he insults Em’s parenting skills and says “…Kim’s a known slut, what’s Hailie gon' be when she grows up?” So this is retaliating, saying that Ja Rule’s kids must be terrible like him. This track is aimed at Ja as retaliation for that track anyway. He also retaliated to Ja on this issue on his 2004 track “Like Toy Soldiers” on his Encore album.
DON’T fuck with Em’s daughter. You’ll suffer for it.

This is also a reference to 50 Cent’s “Back Down”

Yo mami, yo Papi
That bitch you chasin' ya little dirty ass kids
I’ll fuckin' erase them