We consider the failure of localized control in a nonlinear spatially extended system caused by extremely small amounts of noise. It is shown that this failure occurs as a result of a nonlinear instability. Nonlinear instabilities can occur in systems described by linearly stable but strongly non-normal evolution operators. In spatially extended systems the non-normality manifests itself in two different but complementary ways: transient amplification and spectral focusing of disturbances. We show that temporal and spatial aspects of the non-normality and the type of nonlinearity are all crucially important to understand and describe the mechanism of nonlinear instability. Presented results are expected to apply equally to other physical systems where strong non-normality is due to the presence of mean flow rather than the action of control.