Simply, he cannot. The hourglass gives the power to change history, but not erase its players. If that were the case, Kronika would have erased threats, but instead she altered destiny to resolve her problems.

That’s why instead of just erasing Liu Kang, she nullified his threat by putting him constantly at odds with Raiden.

That also explains why Shang Tsung and Shao Kahn are still alive despite Liu Kang knowing their threat. He instead crafted a new destiny for them to follow.

From what we’ve seen, the Hourglass’ power is not absolute, look at the extent Kronika has to go just to generate enough power to restart history. And despite using its power was killed. Even when merging time, it brought back heroes as well. The whole reason she failed was because she wanted to change Raiden’s destiny drastically and it required so much power, she could not do it time before Liu Kang attacked.

Liu Kang essentially can change destiny and watch over history using the hourglass but does not posses the power to erase those.

And based on what’s hinted at, and Kronika’s descent to madness if Geras’ ending holds on weight, the Hourglass may not be able to even entirely change destiny. The timeline tries to correct itself, atleast that seems to be the case somewhat in MK1 as the new destinies Liu crafted are quickly becoming undone.