You can always give extra points for homework which then compensate from lacking in tests. If you get perfect points in test, well maximum grade. If less than perfect, you can up grade with those extra points. Fair for everyone.

This assumes the point of education is to be fair and get everyone a good grade, which it's not (at least, it shouldn't be).

>The solution is making all homework optional and having an old-school end of semester exam.

Not really. While doing something to ensure that students are actually learning is important, plenty of the smartest people still don't always test well. End of semester exams also tend to not be the best way to tell if people are learning along the way and then fall off part way through for whatever reason.