This is subtraction by cutting parts of the letters off, then using the negative space to the left. One thing that is useful when looking at designing type or anything for that matter is taking note of the interesting shapes in the negative space.
In this one I also shifted the block left but it makes the letters very obvious which isn't fulfilling the requirement of my statement "how can this become art but still be legible?" This doesn't seem like art to me.
Now this is more interesting: you draw a block around a serif letter and then subtract a rectangle from each of the negative spaces within that block and you're left with this! Looks like brail or morse-code.
This one is the same but more exaggerated. I've taken the corners out too.
This is shifting the block up and to the right and the negative space that's left is in rectangle format. More readable though.
Now this is really pushing legibility:
Here's an example made on the computer.
And here's a really elaborate one!
Now this is interesting. This time I've used a serif letter, duplicated it and moved it up and to the right, then deleted the first one. I wonder what this would look like with a word. Probably very readable though. Hmm.