Today I met a couple on a hike who mentioned that they hadn't found any food on the island yet that impressed them (they were happily subsisting on papaya instead). Here is my list of some nice places to eat that still make the demanding "My Kauai" criteria. Alternatively, if you prefer, this omits the transplanted fancy restaurants that I'm sure are fine but are just like one finds in the up-scale parts of almost any large American city.
Generally these places are pricey by any standard. It isn't hard to spend forty or fifty dollars per person (or more with drinks) for a full meal. Kauai is expensive overall, it's a tourism-driven economy, and at the upper end of the food chain prices go up quickly. But I've felt at these places that you get what you pay for: your mileage my vary. As at any restaurant, breakfast and lunch are considerably less money but proportionally on the high side.
Postcards (Hanalei) is a very nice dinner-only reservation-recommended (or be prepared to wait) place suitable for a special occasion. Wait staff is always great. Kitchen can be on the slow side. Plenty of local ingredients, largely vegetarian but including fish, with a creative changing menu. Dine in a converted house with a nice garden (no ocean view).
Common Ground Garden Cafe (Kilauea) is a very good very organic place to eat. Off the highway perhaps a mile on the mauka side, the restaurant is located in a large spread where they grow a lot of the ingredients right there. Formerly a guava farm, Common Ground has several ventures, seeking to integrate with the local community in a wide variety of activities, the restaurant being just one. Had a terrific breakfast with good service and will be back soon.
Kalaheo Cafe (Kalaheo) is a cut above, especially at dinner. I almost always have the fish special dinner which varies. Breakfast menu everything is good. If you like sweet rolls try the "Knuckles" and usually a good array of desserts. The coffee is good: usually "Kauai Estate" and a rotating selection.
That's my short list: I haven't spent a lot of time exploring the high end, but these three places I can solidly endorse for a nice meal which I like to get every once in a while.
Runners up are fairly nice places and good alternatives, but they don't quite have my unqualified recommendation for one reason or another, often nearly complete lack of local influence (i.e. the restaurant could be anywhere).
Kalaheo Steak & Ribs (Kalaheo) - had a good meal there, they do often have fish. Very popular most nights. Full bar adjacent.
Tortilla Republic (Poipu) - up-scale Mexican with full bar, quite popular evenings.
Dolphin (Hanalei) - good fish-centric restaurant with sushi bar (I haven't tried the sushi, am skeptical) and a bar, located on the right coming into town next to the Hanalei River. They have a fish market behind the restaurant selling fresh fish where I have had good poke.
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