I think the main reason Pentax isn't making a 50mm f1.2 is AF. At f1.2 the AF would be unreliable, not to mention DoF would be so thin that even a slight shift between the focus confirm and shutter action could cause things to go OoF. This would be bad news for Pentax, because a lot of users would once again blame the AF system (often pointed out as Pentax' weak point) or the lens being unsharp, rather than learn how to use the two. Well, this, and the fact that f1.2 is a niche lens and wouldn't sell as many units as a trusty DA 50mm f1.8.
And regarding some of the comments, of course there are lenses larger than this new Sigma. But how many of them are 50mm f1.4? (not counting medium format lenses

) But I do agree that Sigma has been getting very good over the past few years. In the past, it was often dismissed, but now it rivals "the big boys." And I guess it has to make an overengineered lens to compete against the "regular" 50mm lenses that camera brands are offering