so the technical aspect of the scenario is possible, but the question that popup is why ? if I have that kind of power I would just mine and make money, because such operation will cost millions of dollars, who wants to invest (lose) millions of dollars to do such thing ?
the million dollar question is what the government and big organizations think of Bitcoin ? in which position Bitcoin stands ? is bitcoin a threat for them ? will they ever regulate bitcoin ?
it is a serious matter that should be discussed but when you have the answers to these questions it will be easier to imagine the 51% attack.
Thanks for the answers, to diverge again as to why: If bitcoin continues unchecked it will likely displace fiat currency to a large degree. Fiat currency is the main power source for the entire banking industry and to a lesser degree the US Govt. The US / European Establishment are very unlikely to stand by as a large portion of their power structure is dismantled and handed over to diffuse individuals. You can see already with the Mt Gox account seizure, bank account closures, etc. what the govt/banks think of bitcoin - they want to destroy it. They have already done the same with EGold, Liberty Dollar, and many others. However, bitcoin is so widely held, popular, apparently difficult to attack, and clearly a moral good that a traceable attack, at this point, is going to be a last resort. I'd expect to first see a continued propaganda effort and further attacks on the fiat-bitcoin interface. This will drive bitcoin further underground and give impetus to the propaganda that it is the currency of illegal activities. Eventually this can attempt to build public support for destroying bitcoin. So, back to the most important questions...