This is all wrong. You have been misinformed.
Schools can do this, it doesn't make things fairer or not. It just means all moderated assessment marks will be the average of the highest and lowest marks. Students will be worse off, their marks will be lower than if the school did it properly. So there is something stopping a school from doing so - it will give students lower marks.
You need to understand the process of moderation.
http://www.boardofstudies.nsw.edu.au/hsc-results/moderation.html
The school marks are proportionally adjusted such that they are moderated according to the cohort's performance in the HSC exams.
No, moderation is the most fairest and most possible way.