According to Merriam-Webster's dictionary, to be shod means to be wearing shoes or to be furnished with a shoe.  The narrator of this poem tells us that the marching soldiers were in terrible shape and that many of them "had lost their boots" (line 5).  Nonetheless, they have no choice but to keep marching, to keep moving to their next position, so they limp on, "blood-shod" (6).  Since they have lost their boots, but must keep marching over scarred battlefields and rough terrain, it is likely that their feet have actually become bloody, torn up by these conditions and the men's inability to rest or find new boots.  Therefore, to be "blood-shod" means that the men seem to be wearing boots made of blood.  Their socks would have become soaked in their own blood, so it would appear that they are actually wearing bloody boots, although they are really just marching on horribly bloodied feet.

The term 'blood-shod' (line 6) means literally that the soldiers are wearing shoes of blood; they are having to wade through all the blood and gore that surrounds them in the midst of trench warfare. The phrase is a play on the common word 'bloodshed' and heightens the vividness of the grim scene, as does the poem in general. The poet's utter revulsion at the whole business is never in doubt. Owen lays bare the horrors of war with his brutally vivid descriptions, culminating in the final verse with the portrayal of a man who is gassed:

the white eyes writhing in his face,

His hanging face, like a devil's sick of sin (lines 19-20)

Owen's aim in this poem, and in his poetryas a whole, is to denounce the evils of war. At this time many people were simply not aware of just how bad things really were in the trenches of World War I. Owen aimed to shock them out of their complacency and to get rid of any illusions that war is a fine and noble thing, as claimed by some, for example the Latin poet Horace. The title of the poem is part of a quote from Horace, and the whole quote is given at the end of the poem:

Dulce et decorum est

Pro patria mori (lines 27-28)

This can be translated as: 'It is sweet and right to die for your country'. Owen aimed to expose this idea as 'The old Lie' (line 27).