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If only few players control majority of the hashrate, I would say it's not secure at all and the project is at the mercy of the regulators.

1. It is not all about mining: https://en.bitcoin.it/wiki/Bitcoin_is_not_ruled_by_miners
2. Big server farms:

Quote from: satoshi on July 29, 2010, 02:00:38 AM

The current system where every user is a network node is not the intended configuration for large scale. That would be like every Usenet user runs their own NNTP server. The design supports letting users just be users. The more burden it is to run a node, the fewer nodes there will be. Those few nodes will be big server farms. The rest will be client nodes that only do transactions and don't generate.

And note one thing: most users will not mine in the future. They will be "client nodes".

3. If you have 51% in any Proof of Work system, then you no longer compete with other miners. You compete mainly with yourself. Going above 51% simply means, that you produce more Proof of Work than needed, and you make your own blocks harder to reverse, than anyone else's blocks. Which also means, that not only it is costly to compete with you. It is costly to also reorg your own chain, which you mined.

Some example: you have regtest-like network, but with difficulty adjustments. Is it profitable to run some ASIC here, and have blocks with 64 leading zero bits? Obviously not. Reorging that would be costly not only for your competitors, but also for you. Which means, that if you are a regulator, and you find out in the future, that "hey, this decision was wrong", then you would need to reorg your own, very strong blocks. Because if you don't, then the truth will be written in the chain, and shared with every non-mining node.