Why is the term lost generation used to describe some writers of the 1920s?

Because of a feeling of chaos and lostness after World War I.

Details:

Novelist/poet/playwright Gertrude Stein referred to herself and other writers like her as "The Lost Generation."  World War I and the aftermath of the war is what gave them a feeling of lostness.  The Lost Generation was affected by disillusionment by those came of age during the war years, and began to question traditional values.  Some of the writers of the "Lost Generation" were Ernest Hemingway, F. Scott Fitzgerald, and T. S. Eliot - along with Gertrude Stein herself.  

- "is not only a luminous passive watcher in the night sky, but it is a powerful force.

it does symbolizes love,   lust   and dreaming and is seen as a power symbolic force that determines and affects human behaviors and reactions.

in the context of the question it does remain you that he events are only taking place at night and the reader of the passage of time."