Did this just stomp my chance of ever being with him?

Middle school guys always get stupid and uncomfortable, so just talk to him and act like nothing happened. You probable werent supposed to hear him talking to m, so he probably doesnt know you heard. Lol. Once i had a huuuge crush on my best guy friend, and my friend told him, and i had to talk to him about how we are just friends, and we're still best friends. So maybe you should talk to him about it?