When you hold the phone in one hand with the bottom corner of the device pressed into the middle of your palm (that's a fairly standard way to hold something like this), you'll notice that the joint where your thumb joins your hand is basically level with the bottom edge of the screen. This means you can reach down and across the screen easily, accessing the dock and other buttons that will be low on the screen. Now, try to reach lower than that. You'll probably find that, even if you have decent motility in your hand, reaching much below that point starts to take some effort. It feels less comfortable and, more importantly, a thumb pulled so far down is far less mobile and can't easily be used to interact with the screen. If that space below the screen wasn't there, that's where you would have to reach down to in order to use your phone - and that would be a very bad design.