It doesn't have biological significance, but it is more convenient to wrap the date when there is the least activity of people (the same reason why we switch DST between 2:00 and 3:00).
I think permanent DST makes sense from the biological/physiological point of view. Almost no people go to bed at 20 "solar" time and wake up at 4 -- they have it shifted later, so the "biological midnight" is indeed around 1 or 2 hours after the astronomical one - thus what we call "DST" matches better. This matching also helps against the confusion when writing an email late in the evening (i.e., after astronomical midnight) and use something like "we will meet tomorrow".