mm417,
I'll be the first to tell you that people can and do recover from, and learn to manage, addiction and mental illness.
But most of us find that it takes some time, work and effort to accomplish this. In the meantime, we typically don't make the greatest relationship partners. Just from what you've written, it sounds like this man and you have fallen into the most common trap, which is (your words): "hanging onto each other for dear life". This is most likely why his therapist is saying your friend replaced his addiction with you.
So my advice is to do exactly what you've decided, and stick to it: just be friends for now. If it is meant to be more, you will figure it out eventually. In the meantime, go live your own life. Hard though that may be, I think in the long run you won't regret it.