What does the sentence mean?

The judge quite rightly says that he has to interpret the law as it's been passed.
Quite puzzled by the word "as" here

You could also write it like this: "The judge quite rightly says that he has to interpret the law in the form it was passed." This relates to the debate about 'judical activism' that is particularly strong in the US. Some people feel that judges have overstepped their authority by interpreting laws in a broad way, and apparently the judge quoted in your sentence agrees. He is saying that his power to apply the law is limited to what the law actually says.

You will see this use of "as" pretty often -- when you buy something "as is", or play a golf ball "as it lies". It isn't always used only as a comparative -- it can also mean "in the manner of" or "in the state of".