I'm going to tell my friend their crush is not interested in them and to move on
Why are you going to say that to your friend?
I don't think there is anything wrong with it.
You should generally let your friends handle their own romantic interests. Getting involved like this could just hurt your friend's feelings, and could make you appear to be interfering and jealous.
I'm not the type to just stand back and watch. I'm going to intervene.
I don't know the details of your friend's crush, but it seems like your mind is made up.  If your friend is pining after a relationship that is truly unrealistic, then you might be doing the right thing.  However, if there is a chance of romance, you shouldn't be too blunt with your assessment.