Can formalin fixed tissue stored in absolute ethanol be used for histology?
Can they be used? Sure. How much distortion you get will depend on the tissue type and several other factors. How important that distortion is will depend on what you are trying to measure. "Too much distortion" is a relative term. You can't really know how bad it will be without trying it.

Should this ever be done intentionally? No - there is good reason for using the gradual dehydration steps. I would be really hesitant to do any quantitative analysis or draw any solid conclusions from tissue processed incorrectly, though.