31337 was originally created by hackers who used UDP port 31337 to hack into computers. 31337, when translated into letters, coincidentally became "eleet", which sounded very much like "elite". And so they called themselves 31337, or elite hackers.
This "word" was later to be shortened to "1337", or "
leet". The use of this word has spread to the gaming community, where many no-life-still-thinking-they-are-cool people use it. It has also become a language, where symbols are used to resemble letters.
People who type in 1337 are usually "high ranked" people with no life other than playing their favorite
MMORPG.
They would say
something like:
OMFG!! 1 pwnt
da n00b bad so STFU NUB!!
Translation:
Oh, my fucking god! I owned the newbie bad, so shut the
fuck up noob!
This, as you can see, makes no sense. Except if it's to make fun of people to whom it does make sense.