Seb,
Good teams are all about balance. In Palu and Hooper with have two tackle breaking back rowers, one who can play quite tight and one that is best loose, who both are average to poor line out options. As they are our 2 best runners in the pack, we need a player to hit the rucks - That's where Fardy comes in. Palu is a great player and a big hitter, but he does not put a lot of pressure on at the breakdown to assist our 7 - That's where Fardy comes in again. Kaino for our back row, to quote Nick Cummins, would be "all sizzle, no steak" so to speak.
The All Blacks have McCaw who is a dominant breakdown player, an excellent back row line out jumper but not the ball runner that he was. In addition he was never a tackle buster. Then they have Read who is an excellent back row line out option and excellent wide runner. In that mix they need a tackle buster and big hitter. Kaino provides exactly what they need in that regard. The fact he is not an excellent line out jumper in the same calibre of Read doesn't matter as he would be the 5th choice to use and ultimately somebody from the back row has to stand at the very back and not be a target.
Even if Fardy was much better, I would have Kaino over him if I was the AB's. But for the Wallabies, with the team we have right now - especially when you consider that Skelton is the reserve lock and Higgers the reserve likely to come on at 8 , I'd have Fardy every day of the week and on Sunday.