Stands for Eleet. This is the original form of pointing out one's greatness from any standpoint, beit athletic skills, academics, or even hacking or cracking processes.
It was coined by a cdc group when they listened on a port :31337 and pointed out the Eleet-31337 - ness of their exploits.
Dude you're true 31337.
1337 is a later variant used mostly by trendy kids who like to taunt others in online video game play.