I would keep my distance. Be there for her (again) when they break up, but let her know you can't watch her do that to herself. I think you are right that this is like a drug addiction. Until she is done with him, she will do the same thing over and over. There's nothing you can really do to make her see the light.

Maybe the next time she does this, you could convince her to go to a counselor? I'm sorry you are stuck with this - it sounds like a really hard situation. I hope this guy moves away or something...