I don't know where it orginated from, but it's a very commonly used word while I was hanging out in #skinnerz on irc, some of whom I still interact with here on the board.
Leet, I'm assuming, is a word associated with geeks... a different version of being "cool." So when someone calls someone else "leet"... I am assuming it is the geek word for "cool."
leet also sounds like the end part of elite, written in l33t/1337 language