As far as I know, this was never fully explained. But if you think about it, it kind of makes sense.
First, if we look at the plot, healing Hinata is one of the best way for Kabuto to fulfill his mission. Hinata starts coughing, nearly vomiting blood. Let's say Kabuto had not interfere, her condition might have gone really bad. At some point this would have made a fuss in the spectators (imagine Kiba calling out loud "Hey, Hinata is dying !" and so on). This might interrupt the Chunin exam, which is something Kabuto doesn't want. His mission is to wait until Gaara fights Sasuke and then start the attack on the village. Healing Hinata at that moment is a good way to keep the exam going.
Killing Kiba would not help at all. What to do with the body? Furthermore, some ninjas can sense killing intent. So it's in no way a good idea to kill a worthless kid at that moment. Just knocking him is enough. If somebody finds the 2 kids (Hinata and Kiba) laying down but alive, nothing happens. While if you find dead bodies, this might alarm everyone and Kabuto's mission would be a failure.
This is also coherent with the role he is playing (a member of ANBU would have done something, right?).
Now, why did the scenarist include such a scene? It is more difficult to answer to that and what follows is only my own speculation. In my opinion, this is a way to indicate to the reader that Kabuto made it to the arena and is ready for the next part of his mission (last time we saw Kabuto, he was still far away from the arena, just after killing the ANBU agent he replaced).
This is also a way of raising the tension. The reader has more and more indications that something is going to happen soon (other ninjas talking about "the mission", ...). When Kabuto knocks Kiba, this indicates to the reader "uh oh, it's coming soon..."