Derives from l337 (leet) as in l337 5p34k (speak). In this context l337 means elite or the best.
del337, on the other hand, means to lessen or take away from someone's l337ness. Synonymns of this term are moded or dog out or diss. A non-colloquial term commonly used is put down.
Oooooooooh, you just got del337ed!
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