Thomas Cassidy said:
It is capitalized because many of the translation committee considered it a proper name.
Friend of God was a name which Abraham was known by among the nations. He is called that by the Moslems, ???? ????, "Khalil Allah", the Friend of God. And the Quran says of him "God took Abraham for his friend'' in Sura 4:125.
It would seem when the word friend was used as a name, it was capitalized. Consider:
Matthew 20:13 But he answered one of them, and said, Friend, I do thee no wrong: didst not thou agree with me for a penny?
Matthew 22:12 And he saith unto him, Friend, how camest thou in hither not having a wedding garment? And he was speechless.
Matthew 26:50 And Jesus said unto him, Friend, wherefore art thou come? Then came they, and laid hands on Jesus, and took him.
Luke 11:5 And he said unto them, Which of you shall have a friend, and shall go unto him at midnight, and say unto him, Friend, lend me three loaves;
(Here it shows up well, friend being used twice, once as a form of address and capitalized)
Luke 14:10 But when thou art bidden, go and sit down in the lowest room; that when he that bade thee cometh, he may say unto thee, Friend, go up higher: then shalt thou have worship in the presence of them that sit at meat with thee.