I believe that Baba Abdalla’s blindness symbolizes greed. He wanted more riches, even though he already had plenty, and when he wanted to possess the treasures hidden in the bowels of the earth and more. So thinking that the dervish was hiding some kind of treasure from him he asked the dervish to apply the ointment to his left eye ignoring the dervishes warning about becoming blind if the ointment was to be applied to the right eye. He became blind because of his greed and lives his life without sight but he realized the importance of the things he had and learned to appreciate them.
Hope this helps