In days of old, when knights were bold, and we had wooden aeroplanes and iron men, the RAF used QFE all the time for circuit work and general local flying (and you used the word "height". If you were going further afield, you changed to "Regional QNH". This was IIRC: "The lowest forecast QNH for two hours ahead for the Flight Information Region in which you were flying" (and you spoke about "altitude").
Then there was a "Transition Altitude" (can't remember, but I think it was set by the FIR), at which you set 1013.2 (I believe it is 1014 now - btw, what is the Q## for that ?) and we started talking about "Flight Levels". I am not sure when we began doing this, certainly I was flying Meteors and Vampires up to '54 and we weren't using the term (or did we only do it in Controlled Airspace ?) I was instructing at the ATC School (Shawbury) from '64-'67, and to the best of my recollection, that was what we were teaching then.
In US and UK '41-'42, India and Burma '42-'46, I never used anything other than QFE (ie, I zeroed the altimeter when I got in, and never touched it again).
Of course, the Altimeter Setting Accident was, sadly, fairly common in those days. Our older members may recall the Near Miss of the Century - the Nairobi Comet - in which thirty-odd BOAC trusting pax were (inadvertently) taxied, at some 200 mph, in total darkness, somewhere on the E. African scrub, for about 100 yards or so before the horrified crew got back in the air
(and landed safely in Nairobi !)
The incident (in the '50s) is well documented: if you ferret around in Google/Wiki, I'm sure something will turn up.
D.