This is one of those words we use (Especially around the Caribbean) as place-holders for many reasons, usually to make reference to something that is annoying either a little or a lot, without actually naming it. Thus, “¡Que vaina!” means something like “Damn this!” while “Deja esa vaina.” means “Stop that.” or “Stop doing that.” So it seems to me that answering “How are you doing?” this way is the equivalent of saying “Fine, everything’s fine!”