It appears that your friend may have some serious mental/emotional issues to work through. I'm not a psychologist, but the worst thing you could do now would be to pull out of her life completely. She's obviously trusting in you as a friend if she's confiding in you. If you suddenly stop being a source of trust and support, it may aggravate the problems she's working with.

Would you want to start a relationship with her? Probably not, unless she makes a concerted effort to fix the problems in her life. But you can definitely be a supportive friend without dating someone. And, who knows: maybe one day down the road she might be in a better situation with her life.