Why is she confusing me?

Who cares?

This is not meant to diminish your feelings, but seriously, wake up and smell the coffee. She's not interested in you. Move on. Stop concerning yourself with her (to your mind) crappy life choices. She is presumably an adult and can make these decisions on her own, right or wrong.

Be concerned as a friend if you wish, of course we don't want to see others harmed. At least, most of us don't want to see that.

But get out of the mindset that it's about you, your looks, etc. You have got to let that part of it go.

Or just drop a dime on this drug dealer as he can not date her fr0m jail.

She was honest in telling you that she considers you a friend. The spark was just not there for her with you. Move on. Apparently she gets turned on by ugly drug users. Maybe you dodged a bullet.

Girls, especially young girls experimenting with their sexual power, will flirt even with guys they may not want a relationship with. She wants to use you, to keep you as her protector?, friend? It was never my thing, but I watched alot of my friends do it, with a certain amount of distaste. Maybe you need some distance from her for awhile. Some girls learn from a bad relationship and rush back to a good guy. Some never do. Sounds like you need to back off and let her make her own mistakes.