It means "poor vision in both eyes" or "generally poor vision".
"Half" doesn't mean "50%" here, it just means "significantly on the way to being". Similarly, "half dead" means "badly injured" (or perhaps just extremely tired, as an exaggeration), "half asleep" means "feeling very sleepy, or perhaps dozing but still conscious".
If someone had lost an eye, but could see well through the remaining one, you wouldn't call them "half-blind": they can see almost as well as someone with two eyes - the only difference is a smaller field of vision.
If someone had lost an eye, and had poor vision in the remaining one, you could still describe them as "half blind", but you could also say "He only had one eye, and that was half-blind.".