What does this mean and what is the origin of this phrase?
I could be mistaken, but I believe this exact phrase originated on Slashdot, in an April Fools' prank on April 1, 2006.
From the Wikipedia page on Slashdot:
The exact Slashdot article said this:
There was a stream of articles on the site that all followed this theme of writing, using lots of caps and texting phrases like LOL, OMG, lots of exclamation points, and getting excited about things like My Little Pony, glitter, the O.C., and other things young girls would be interested in.
Here is the Slashdot site logo from that day:
The meaning of the joke is that this is how young girls write things. So, this phrase is used as a way to jokingly react like a 12-year old girl would.
According to Urban Dictionary:
l33t (from 1337) => leet => elite (gamespeak)