Investments made in risky assets with borrowed money is generally not a wise thing for most people to do. But if you are employed in a company that runs a hedge fund, a mutual fund or even in a company not involved in financial products there are many instances when borrowed funds are used. And this can be beneficial if done in a proper manner.
In your question you say that $1000 invested can become $800 or $1,400 with an equal probability. The expected value of an investment of $1000 is equal to $1100. The standard deviation is 424.26. For $2000, the expected value is $2200, with a standard deviation of 848.52. As the amount borrowed and invested increases, the expected return and standard deviation for every $1000 remains the same but the total loss increases. For example, if you invested $1000, the maximum you could lose is $200, for $2000 it increases to $400 and for $3000 it is even higher at $600. Whether you should make this investment with borrowed money depends on your risk appetite and what you think is the appropriate increase in potential profits to justify the extra risk that is being taken.