This may seem cheap, but there are already many, many orders out there for ASIC, and all of the factories are backed up. Butterfly Labs only recently released models that have been on order for many months (I want to say greater than 6). If you put down $1.2 million, it could be months before you got your machines and by then you would no longer control 50% of the mining.

This dollar amount is also particularly low because ASIC technology is new - most people who have put money into ASICs aren't even mining yet. Once the technology is settled in, controlling the block chain will become more expensive.

Furthermore, the number of things that you can do while controlling the block chain is actually really limited. You still can't spend other people's money. You can prevent people from spending money, but you can't make them spend money. You can double spend yourself, but if the bitcoin community was aware that someone was manipulating the block chain, they would be much more careful about accepting transactions from new wallets, and would reject all transactions from a wallet they knew was controlled by the double spender.

Furthermore, if you did take control of the block chain I personally would dump a few thousand into miners myself, to help regain control of the system. I'm sure that I'm not alone, and the act of bitcoin users simply 'fighting back' may be enough to minimize your control of the market.

And finally, as other people have stated, you can always change the hashing algorithm. Most people use 1 bitcoin client. In fact, this client once had an update that caused an error and forked the block chain and allowed at least one person to double spend $10,000. In the event of a major crisis, there would most be enough bitcoin users willing to fork the block chain that you could indeed get a new hashing algorithm designed to be incompatible with the attackers hardware. The choice is between that and watch your 'distributed' currency fall under the control of a tyrant.

Someone taking control of the mining process IS a risk, and there are some powerful things you can do with that (like mine 100% of all the new bitcoins, taking control of the supply, and double spending, and rejecting transactions by others), but it would probably take a lot more than $1.2 million dollars because people would fight back, and you are still at risk of the rest of the community forking away from your control. That said, you could still do terrible damage and the price would probably plunge, and you may be able to double spend millions of dollars before enough people noticed to start rejecting your transactions. (are there even millions of dollars worth of things you can buy? and would you have to worry about a government getting involved because you committed financial crimes?)

And even if you manage to maintain control, all that will happen is people will stop using bitcoin until you let up. It's much like a DDOS. It takes power (electricity) to maintain that much computation, and the longer you maintain control, the less bitcoin will be worth.

Edit: I want to add that the scariest attacks only happen at 50% control. At 40%, you can only double spend -sometimes-, and I don't think that you would be able to block transactions at all. Furthermore an organized network (and there is much debate about how organized bitcoin could get, after all it is designed to be distributed) could undo any double spending and you would be limited to slowing bitcoin down. At 20% market power, the probability of you achieving a double spend or undoing some transactions is very small.