Regarding your DD telling you to put a shirt on, I think that's a really good sign actually.
I'm a CSA survivor, and yeah, the abusers tell you what they are doing is "normal." But now your DD is in counseling and being forced to realize that it is NOT normal, and she is setting boundaries. That's good. Your kids need to learn a new normal after all this fucked up shit.
You've heard stories of children being abused by their fathers, and their mothers knowing and letting it happen? Then the children are sometimes MORE pissed at the person who was complicit than the person who actually abused them. I would watch out for that if I were you.
I get it ABD. We allowed a lot of stuff we should NOT have. I would go with the boiling frog theory. We just didn't realize how bad it was getting because we were being groomed too.
I don't want to have much sympathy for your wife, but imagine the grooming she must have gone through during her abuse. The problem is that she isn't getting help for it. My ex is a CSA too, but he refuses to get help for it. His father raped him, and let his friends rape him. It's terrible and disgusting, but it worries me more for my own kids now that he doesn't get help for it. If he got help, I would feel more confident that he won't repeat the cycle. But since he's not getting help, I fear he will, having never learned that it's NOT normal, which I suspect is the case with your EW..
Like NG said, I can't prevent what might happen, but I talk to my kids very often about their private areas, who's allowed to touch, who's allowed to see, etc.
No one ever talked to me all that much as a kid about my private areas, so a man was able to take advantage of me. It's not fair your kids have been exposed to all this, but I'm glad they are getting help and being given information so they can know what's going on and not be groomed by it anymore.
And my last thought, I think the ones on this website with the most fucked up exes are the ones that need the most help. There was something wrong with us too that allowed us to tolerate our ex's behaviors. I didn't want to admit I did anything wrong, but I had to if I wanted to get healthy.
Knowing that most sexual abusers were once victims, it scared the shit out of me wondering if I'm more prone to abusing my children because of the abuse I endured as a child. I faced it, was honest with myself, and did everything I could to heal myself.
I will still pity CSA survivors who don't get help, but if they continue the cycle and become abusers themselves without taking responsibility, I can pity them while they are in jail. Once you are an adult, you have to take responsibility for your actions. You can't blame your past forever..
Sending lots of prayers for your kids..