Kwilkins, how long did you have the pleco in the 10g before you added Blue? If you didn't quarantine the pleco, it's definitely possible he passed the ick onto Blue. There is a theory, one that I believe actually holds a lot of truth, that ick is always present in the tanks but our fish have built up an immune to them. When they get stressed, such as adding a new fish in, their immune system becomes weak and they become susceptible to the ick parasites.
Since Picaso doesn't have ick, it's best to take Blue out and treat him in the .5g. The best way to treat ick is with aquarium salt, high heat, and 100% daily water changes. Mix up 1 1/2 tsps of aquarium salt with tank water, letting it dissolve first, and then fill Blue's tank with that. If you can, try to get the heat in the tank up to at least 80 degrees. Ideally, you want the heat at 86 degrees but I don't think you can heat that small of a tank so don't worry about that part. Change the water completely every day and rinse his tank before filling it and redosing it with salt. Continue this treatment until you don't see any parasites on Blue and then continue it for an extra 2-3 days after that.
By the way, what kind of pleco do you have? If he is a common pleco, he will grow much too big for a 10g.
Good luck with Blue!