You can do it losslessly!
I happen to have considered this myself, and I've even done it with a few
chess fonts. However, I had obtain permission from the creator of one, who
had licensed it for non-commercial use only.
What you would do is make a drawing in Inkscape using all the font's
characters, convert the text to paths, and save that SVG file. This is
perfectly legal; some foundries even have an explicit clause "You may import
characters from the font as graphical objects into a drawing program and
modify such graphical objects." Then you would copy those outlines into
FontForge (the two programs support copy/pasting to each other). And then you
would generate the font. You could analyze the old font's OpenType features
in FontForge and recreate them in the new font. This whole process could even
be automated.
But it would take a not insignificant amount of work, depending on the number
of glyphs in the font, and even then I wouldn't guarantee legal safety. I
imagine that if we started doing this en masse, the foundries would complain
and sue us. Even if we won, they would probably work together to introduce a
new DRM-encumbered font format immune to our wizardry.
