The act of assigning kanjis to words that ignore kanji's meaning is called 当て字 (ateji), and that has a long history. According to Wikipedia article on 当て字, this was very common in the past because the language used to rely on Kanji/Hiragana boundary to help distinguish nouns, verbs, etc from particles. The article is full of great examples like 珈琲, 滅茶苦茶, and 出鱈目. Country names are full of those, too, such as 亜米利加 (America), 仏蘭西 (France), etc.
As others have mentioned, 夜露死苦 is an 当て字 unique to the 暴走族 culture, who tend to proud themselves in being unique, outlaw, and unafraid. They tend to prefer kanjis that have negative conotations (死 or 苦), and kanjis that are busier (露).
I should also note that as with any such words whose value depends much on novelty, 夜露死苦 no longer carries its coolness simply because it's been around for too long and is now known by too many people. So today its only used to sarcastically refers to the dying 暴走族 culture, and I doubt if any 暴走族 member would use it (if there are still such people, since they are in decline.)