The primary reason for a 4wd on Kauai is if you plan on doing any off-road treks. If you haven't been to Kauai before, there are enough places to see without having a 4wd. Even going over the cane roads (e.g. Polihale State Park) is ok in a regular car. I am not aware of any forbidden areas on Kauai by the rental car companies, as there are on the big island, but to be safe check with the company when you rent.