It looks like they downsized it to allow for the hose. My guess is that the hose that is left on the fittings is roughly the same size as the original bulk head size. A short piece like that should not be an issue. But I say with some certainty that if you use half inch pipe or hose all the way back to the pump, you will not be happy with the flow.
Small pipe/hose makes the water move faster. The faster the water, the more resistance between the water and the walls of the pipe is realized. Fittings like elbows and other transitions all make more resistance. I'm guessing you have seen the pump curve for your pump, or at least a chart that tells you what the pump will put out at some given head (height). The resistance in the pipe gets added to that formula and looks to the pump just like you raised the tank a little more. It all equals less flow.
Play with this and see what the difference is: Reef Central Online Community
When entering the vert. height, use the height from the pump to the top of the water level in the main tank and not just where the water enters the tank.
Oh and I would say you did a fine job there with that find! Nice setup and good price.