Actually, a model can target itself or another friendly, non-master model, with a melee attack / melee spell.
Malifaux main book, p. 62, under Spellcasting:
"Attack spells follow the basic rules for that type of attack".
In this case, a melee attack. Now let's look at combat.
Main book, p. 54, under Strike Attack Sequence - Details
"1. Declare Target, then Check Range
A model must be within the attacker's LoS to be declared the target of an attack. Any model within the attacker's LoS can be targeted, including any friendly model other than your Crew's Master (they're expendable, but he's not, right?) or the attacking model itself. If there are no targets within the attacker's LoS, the Strike fails." [underlines mine]
The reason a spell like Inject Blood has a range of melee, not C, is so that it can affect itself or another model within melee range. It's not feasible that the Black Blood Shaman could Inject Blood from further than melee range, so that's the limit on it. Otherwise, it can heal itself, or any other model with Black Blood, or deal damage to any model without it.
On a side note, with Blood Magic, if you happen to have any non-Master Neverborn models on your crew, other than your sacrificial Desperate Mercenaries, you can use your Black Blood Shaman to give it Black Blood, then use Inject Blood to heal it.