Is there a point where even sleep can be transcended?
For ordinary people like us, sleep is a necessity. As long as we have a physical body, there are certain things that we must provide it: adequate nutrition, adequate sleep, protection from the elements, etc. Although there have certainly been great yogis and tapasvis who were able to greatly reduce their reliance on such things, this is not part of the path of bhakti. The path of bhakti requires us to moderate our use of food and sleep in order to maintain a healthy existence. Then we focus on attaching our mind to God through practicing daily devotion. We do not try to or hope to develop siddhis or to transcend the physical elements.
Sleep is necessary for our bodies, but it should be used in moderation. Sleeping too much is not good for maintaining a devotional state of mind, because it promotes the tamas quality of the mind. Sleep just enough to meet the requirements of the body. The reason that we are so attached to the pleasure of lying in bed and sleeping is because of that tamas gun of our mind. The more we give into it, the more it grows. The more we control it, the more it subsides. As our heart purifies through the practice of bhakti, so does our attachment to sleep begin to reduce. But even a God realized Saint who is beyond the three gunas of maya still sleeps for some time every night.