It is very symbolic to the victims, but it's really meaningless.
It basically tells Madoff that we (the government) are done with you and will be going after your family now.
If the government was interested in negotiating and working with Madoff, they would have sentenced him to something like 40-50 years and told him that the more information he shares, the more likely you'll see daylight again before you die.
In any case, it really does nothing for the victims.