as suspected... it isn't an "ascii" file but contains ascii data.
Often referred to as a "event layer" or simply "csv" for comma,separated values to identify it from tab or space delimited
Add XY Coordinates—Help | ArcGIS for Desktop
- but make sure that there are no spaces in the field names..
- no missing entries for an location in a column
- THEN convert it to a featureclass or shapefile so that it is useable in other analyses
- AND provide it with a spatial reference using the Define Projection tool
- anything else I have forgetten...