I've often wondered what this was about. I've had the idea that it's a form metaphor for how the blood never is shed from a noble, but instead keeps running in the veins, looking blue from the outside. Or maybe it's an actual misconception. What does the phrase come from? Was it used by nobles or about nobles? Why is "blue blood" a noble thing?
Several cultures use the phrase, but it was originally Spanish. People who claimed to be "pure" Spaniards (that is, of Visigoth stock) as opposed to Muslims or Jews, were pale. Visigoth nobles, who didn't work outside as much, were paler still.
Pale = visible veins. Visible veins are blue. Blueblood.
I knew this, but then I needed a source, so here's one: The Politics of Aristocratic Empires, p. 206.
According to the OED, the phrase is relatively modern (1811).
"The nobility of Valencia..are, by themselves, divided into three classes, blue blood, red blood, and yellow blood. Blue blood is confined to families who have been made grandees." -- The Annual Register
As for the by or about, I don't think you'll get a definite answer.
Now I'm wondering who the "yellow bloods" were. I'm guessing the answer isn't nice.