The 22-year-old - who mainly operates as a full-back - has been pulled out of the touring party despite spending the whole week training at the Irish training camp in Limerick.
And Kidney, who has called up Connacht's Gavin Duffy as a replacement, has rounded on the critics and defended his decision to pick both injured men in the preliminary squad.
"Keith has had to be withdrawn from the tour because the injury hasn't responded as much as we had hoped and he wouldn't have been able to play any games," said Kidney.
"There was a chance for both to fit, just like all injuries. You always live in hope in this job."
Ireland play their first test against New Zealand in New Plymouth on June 12 before moving on to Rotorua to face a New Zealand Maori side on June 18 before ending the tour against Australia in Brisbane on June 26.