As others have pointed out, you can use (big) servo motors for drive. This means that you go from open loop positioning (ie needing homeing switches) to closed loop, where you know where your position is at all times.
Optical tracking might be useful, but it also might not for the reasons I'm about to describe
CNC machines generally get "better" as they get bigger, not because they have stronger motors, but because they are more rigid. The problem with this CNC is not power, its rigidity. It will cut well enough for wood and plastic, assuming that the spindle is fast enough. However it will deflect significantly as the material "pushes back" against the cutting force.
In this machine, they are using belts an pulleys (which are contrary to common opinion not very elastic) The pulley used to keep the belt in tension are on plastic parts, which are elastic. (steel is also elastic, but much stiffer, so at this scale wouldn't flex as much, well not before the bolts bend)
With all this flex, it affects the accuracy during the cut. you might have felt when a drill bit binds up in a hole, and the whole drill is wrenched from your hand. That happens in a CNC when starting a cut, or plunging into a pocket.
Where big machines come in, is that they have huge mass, which allows for large rails/linear bearings, which are much more rigid. The more mass also means that when the end mill comes under load, the work piece gets the push back because its generally less mass than the gantry.
TL;DR:
yes you can use optical methods for homing, but its better to spend the money on more mass for the x/y/z assembly.