Also living in NZ. New Zealand does not have enough hospital capacity to deal with levels of covid seen in the rest of the OECD. They have an approx 75% actual vax rate (they BS'ed it up to 90%+ by calculating on the basis of population eligible for shots). If they opened the borders as OP and others seem to think would be good, given the near-complete lack of natural immunity, the not-so-perfect vax rate, and breakthrough infections, they'd be stacking the sick (and dead) in hospital parking lots. It's not like the ambulances can drive to the closest country with more capacity.
That said, they do not need to be doing what they're doing. Delta should have been the wake-up call to get serious about vaccination way back in April 2021. Instead they plodded along with vaccinations as if they had all the time in the world. Hence the current sad rate of NZers with boosters.
When MIQ (quarantine) space got so tight that New Zealanders couldn't get home when they needed to, they should have come up with intelligent solutions. For instance, fully vaccinated people who test negative could do (real!) enforced home isolation with ankle trackers. But no. The gov doesn't want to do anything draconian, so instead they separate people from dying spouses. That's somehow better.
They could have a much bigger public education campaign about masking up, social distancing, holding all gatherings outside. (It's lovely summer here, for God's sake.) NZers think masks are supposed to be chin protectors. One meter distancing for omicron is just ludicrous. Two is a bare minimum, but NZers don't even do one. Etc, etc.
The point being: by implementing ALL available public health measures: vaccination, masking, distancing, improved ventilation, outdoor gathering, effective contact tracing and isolation (they do have quite good income support, not enough to replace all lost profits) -- if they did all that, no, they do not need to lockdown to keep omicron at a low level. See Hong Kong and Taiwan.
But that's too unpopular / costly so they're apparently just hoping vaccination will be enough by itself to avoid the worst. The traffic light system's only real (unstated) purpose is to keep fatalities from overwhelming the hospitals. I'm watching our future progress with considerable interest... 