Why is this film black listed?

The reason why this film was blacklisted was because of its director, Edward Dmytryk. The House Un-American Activities Committee had started in 1949 to hunt "communists" in Hollywood. That included anybody who dared to criticize the status quo of racism, as Dmytryk had done in Crossfire (1947). When the committee interviewed him he refused to answer and was sentenced to a year in jail... quo tempora, quo mores.