1337 and all the phrases from logical reasoning started from shorthand
when people started using shorted phrases such as lol for laughing out loud and gg for good game, i believe that they decided to explore the realm of possibilities. this spawned the theory that since short hand was easy yet different, how about changing a few letters around for coolness. or...
the most basic definition yet
some kid wanted the same screen name as another kid but couldn't so he just made the character with the name only with different characters
~M~A~G~E~, ~M~4~G~E~, ~M~A~G~3~, ~M~4~G~3~
or, it may be just a invention by a player, i remember a kid who started calling something and eventually, it was used by others, i think it was calling lobsters lobbies or something
or as a addition to the shorthand comment, it may be initials that looked cool