Back in the days when the BBS(Bullitin Board System) was the primary interconnection medium for most computer users, a large portion of systems were for the soul purpose of downloading and uploading software. Some of these systems specilised in illegal software (Warez), others discouraged it, some provided a mixture. That was, when you were on the BBS for long enough, and proved yourself a real user your account was given a higher status giving you access to more chat-rooms, more file libraries, and more services. These users were called the Elite, and it is from them that the phrase “l33t speak” came.
Once you got onto the more open BBS systems, it became more dangerous to share warez. For those systems where trading was discouraged, you wanted to keep your conversations private. Some BBS software allowed a SYSOP(System Operator) to scan all conversation for keywords, allowing them to spy on any illegal sharing that went on. Even on the systems where warez was commonplace, users were paranoid of govermental robots sitting scanning all conversations for Warez talk.
The solution to this was to not talk in any way that would trip the sensors. Sensors were looking for words (Warez, Software, Zero Day, The titles of the latest games, etc.) and for talk of the mythical higher level (Elite) that would allow you access to the Cracker Cream, all the warez your phone bill could take.
Some ascii glyphs look like other ones, esspecially when combined. 3 could be misread as E in context, 7 has the same basic shape as T, @ contains a, 1 is nearly I anyway, O is almost exactly 0. So you go from “Elite” which might trip the sensors, to “31ite”, which won’t. And because this is a text-based chat medium, like IRC and SMS would do in the future, words got shorter to save time. Elite becomes leet becomes l33t. Once you get into typing and reading it, glyphs can become multiple characters. For the true cream of the leet, common programming and mathmatical operators can subsitute chunks of text (“2b||!2b” or “To Be or Not To Be” would be the question. Nobler in the mind to suffer the slings and arrows of outragous ascii). The glyph “e”, for example, could be rendered “e”, “E”, “3”, “(-“, “<-", "[-", "