Can the Bitcoin blockchain be compromised for $1.2M?

John wrote up a great, simple description of Bitcoin yesterday and since I finally understand how Bitcoin works (do I?) I wondered what the cost would be to take control of the longest blockchain and compromise Bitcoin. This is also in the comments of John’s G+ post, but the two options I thought of are: a big botnet, and a bunch of ASIC hardware. Here’s a spreadsheet showing my calculations and the result is that you could buy ~$1.2M of ASIC hardware and control ~50% of the compute power going into Bitcoin. John estimates that even controlling as little as 20% of the computer power could cause serious problems, meaning you could do some real damage with $300K.

Does this make sense or have I misunderstood? Happy to hear criticisms in the comments over on John’s G+ post.