I believe the valves are deactivated to reduce pumping loss on the engine.
Quoted from
http://www.superchevy.com/technical/engines_drivetrain/accessories_electronics/0405sc_gmdod/index.html
"In order to eliminate the pumping losses," says Meagher, "you need to disable both the intake and exhaust valve." This results in a completely sealed, deactivated cylinder, which is essentially an air spring being acted upon by a piston. Virtually all the work put into it during compression is returned to the crank during decompression, finally giving credence to the old joke about piston-return springs. (That's nothing. Wait 'til you hear about the muffler valve...)
"Currently, we could disable just the fuel delivery," says Meagher, "but the valves would still be opening and closing and each cylinder would still be doing work pumping air in and out. So there would be no net gain in efficiency--you wouldn't have eliminated the pumping losses at all."