I think that a lot of what goes on in the "wee hours" is partying. I do know that there are some kids, boys especially, who actually sit up all hours playing X-Box or whatever. Innocent enough but I still don't want my kid doing that. Those are habits, at 17, that I don't want to be a part of making. Both my kids will go away to colllege, as I did, after high school, and they can spend those years staying up all night on the campus with their buddies and not interrupt my sleep.
My rules are based on how I was raised. I basically had curfew of 12 midnight for all of the time I lived at home, between high school and college. It was out of respect for my parents household and them not having to worry about me all night and get up the next day and function at their jobs. Sure, there were times when something special was going on and my mom had no problem extending that. But, she was right, all we were doing was partying. Teens do love to sit around and "hang" but they have a different mindset than adults and it has been proven that their brains don't mature until their early 20s in regards to decision-making processes. They get bored and they look for things that are exciting, be it alcohol, drugs, driving fast, a middle of the night swim in the local lake/quarry, rolling someone's house, etc. Or they are just hanging and they get caught up in someone else's drunk driving, vandalism and what have you.
Unfortunately, I know too many teens that were in my peer group that died and, I have to admit, they all happened in those old "wee hours". Sometimes their fault and sometimes the fault of others who were up to no good and they were victims. My DD is lucky that none of her peer group has had any tragedies but a few incidents of trouble have happened to seemingly good kids. None of it in the normal hours. I always have to say "What were they even doing OUT at that time?"
I'm sure many kids spend years being out and running around at those hours and do fine. But I would bet you, statistically, that's when most problems occur.