That differentiation between semantic literacy and functional obfuscation is probably best expressed by folks who consider themselves “hackers” in the classical sense. Most notably this takes the form of “Real Programmers use X”, where “X” may be C, ed, ASM, etc. I believe this attitude is related to the notion of “bumming” as a means of gaining performance at the extreme limit of readability (and sometimes writability) via very terse code or the use of un-or-under-documented features. A more common application of the same attitude manifests as the assertion that well-written code shouldn’t need comments.

Ultimately I think it’s both acceptable and encouraged to appreciate code several, possibly competing levels. Prose versus function, legibility versus efficiency, and as we see with the Underhanded C Contest, humor versus semantics.

The most difficult issue I find with attempts to reconcile multiple modes of expression within a formal discipline like programming is understanding the role of the evolution of languages. For example: Is funny C code fundamentally different than funny C++ code? I would suggest that it is!