At the moment, the debug server hits assets/css. As long as you aren't using a CSS transpiler, this is fine. If you're using LESS, for example, though, you might want to hit a compiled style.css in dist/debug/css during development. The downside of this would be a need for automatic recompilation.
One possible fix would be conditionally including the client-side less compiler via AMD somehow. But, doing that would require that you link to style.less in your index.html, and that would bork the release build (which provides a compiled/minified style.css).
Should be able to always point to the dist dir for debug. Really need a copy task :-/
One of the contributors on grunt-contrib was talking about making one. I'll see if he has time.
Whoops totally forgot this has been updated and fixed.