Actually, that verse doesn’t say “friends,” but in fact it says “allies.” Don’t take Jews/Christians as allies against the Muslims. Which I’m not doing. It doesn’t say anything about not being allowed to be friends. In fact, the Qur’an in 60:8 describes friendship with non-Muslims. So sure, I’ll be your friend. Unless you want to be at war?
Hmmm…let’s look at multiple tranlastions of that verse and in context:
005.050
YUSUFALI: Do they then seek after a judgment of (the days of) ignorance? But who, for a people whose faith is assured, can give better judgment than Allah?
PICKTHAL: Is it a judgment of the time of (pagan) ignorance that they are seeking? Who is better than Allah for judgment to a people who have certainty (in their belief)?
SHAKIR: Is it then the judgment of (the times of) ignorance that they desire? And who is better than Allah to judge for a people who are sure?
005.051
YUSUFALI: O ye who believe! take not the Jews and the Christians for your
friends and protectors: They are but friends and protectors to each other. And he amongst you that turns to them (for friendship) is of them. Verily Allah guideth not a people unjust.
PICKTHAL: O ye who believe! Take not the Jews and the Christians* for friends*. They are friends one to another. He among you who taketh them for friends is (one) of them. Lo! Allah guideth not wrongdoing folk.
SHAKIR: O you who believe! do not take the Jews and the Christians
for friends; they are friends of each other; and whoever amongst you takes them for a friend, then surely he is one of them; surely Allah does not guide the unjust people.
005.052
YUSUFALI: Those in whose hearts is a disease - thou seest how eagerly they run about amongst them, saying: “We do fear lest a change of fortune bring us disaster.” Ah! perhaps Allah will give (thee) victory, or a decision according to His will. Then will they repent of the thoughts which they secretly harboured in their hearts.
PICKTHAL: And thou seest those in whose heart is a disease race toward them, saying: We fear lest a change of fortune befall us. And it may happen that Allah will vouchsafe (unto thee) the victory, or a commandment from His presence. Then will they repent them of their secret thoughts.
SHAKIR: But you will see those in whose hearts is a disease hastening towards them, saying: We fear lest a calamity should befall us; but it may be that Allah will bring the victory or a punish ment from Himself, so that they shall be regretting on account of what they hid in their souls.
005.053
YUSUFALI: And those who believe will say: “Are these the men who swore their strongest oaths by Allah, that they were with you?” All that they do will be in vain, and they will fall into (nothing but) ruin.
PICKTHAL: Then will the believers say (unto the people of the Scripture): are these they who swore by Allah their most binding oaths that they were surely with you? Their works have failed, and they have become the losers.
SHAKIR: And those who believe will say: Are these they who swore by Allah with the most forcible of their oaths that they were most surely with you? Their deeds shall go for nothing, so they shall become losers.
005.054
YUSUFALI: O ye who believe! if any from among you turn back from his Faith, soon will Allah produce a people whom He will love as they will love Him,- lowly with the believers, mighty against the rejecters, fighting in the way of Allah, and never afraid of the reproaches of such as find fault. That is the grace of Allah, which He will bestow on whom He pleaseth. And Allah encompasseth all, and He knoweth all things.
PICKTHAL: O ye who believe! Whoso of you becometh a renegade from his religion, (know that in his stead) Allah will bring a people whom He loveth and who love Him, humble toward believers, stern toward disbelievers, striving in the way of Allah, and fearing not the blame of any blamer. Such is the grace of Allah which He giveth unto whom He will. Allah is All-Embracing, All-Knowing.
SHAKIR: O you who believe! whoever from among you turns back from his religion, then Allah will bring a people, He shall love them and they shall love Him, lowly before the believers, mighty against the unbelievers, they shall strive hard in Allah’s way and shall not fear the censure of any censurer; this is Allah’s Face, He gives it to whom He pleases, and Allah is Ample-giving, Knowing.
And in this verse “allah” instructs muslims who they can
only take as friends:
005.055
YUSUFALI:
Your (real) friends are (no less than) Allah, His Messenger, a
nd the (fellowship of) believers,- those who establish regular prayers and regular charity, and they bow down humbly (in worship).
PICKTHAL: Your guardian
can be only Allah; and His messenger
and those who believe, who establish worship and pay the poordue, and bow down (in prayer).
SHAKIR:
Only Allah is your Vali and His Messenger and t
hose who believe, those who keep up prayers and pay the poor-rate while they bow.
***Looks pretty specific to me. But I am just a poor ignorant kuffir so what do I know.

***