The previous text established that Krishna comes to this world only to help it. When the path of religion is blocked, Krishna comes to clear it. This verse explains how he does so.
He restores religion by protecting the religious. He cuts down irreligion by destroying those who do evil.
Vinasaya ca Duskritam - Vanquishing Evil-doers
Krishna mentions this as one of the actions he performs when he appears in this world. However, on deeper thought, we are not likely to accept this as the primary reason for Krishna's descent to this world. Those who do evil are inherently prone to destruction. Inevitably they destroy themselves, there is not real need for God to personally destroy them.
Paritranaya Sadhunam - Protecting the Saintly
Krishna primarily descends to protect the saintly, not to destroy those who will destroy themselves anyway. However, in this case we also find that the saintly are protected by their own saintliness. Although evil persons often put the righteous through great suffering, we find that those who are deeply spiritual never lose their internal peace and satisfaction. Thus, just as the evil destroy themselves, the good protect themselves. Why then need God appear to "Protect the saintly and destroy the evil"?
First, although the goodness of the good shields them from personal suffering, it is still a fact that the evil-doers often do great physical harm to the righteous. Thus, although they may not personally suffer, they may still be wiped out by the evil. In this senses, there is a need for them to be protected from the evil, that they do not disappear from the world.
Secondly, the greatest need of the saintly is to serve and love God. By appearing in this world, the Lord gives this opportunity to them, thus protecting their hearts innermost desires.