2015 Macbook pro 13" with Dell U2518D blurry font

I recently bought a Dell U2518D monitor to use as my primary display paired with my 2015 Macbook pro 13". This is a 2560x1440 1440p monitor. I used the included display port to mini display port cable and the first thing I notice is the blurry fonts on full 1440p resolution.

I tried many things; using the EDID patch ruby script, using switchresx to create a custom resolution with double the 1440p resolution and setting this resolution as a hiDpi resolution, resetting NVRAM etc. Nothing seems to work. I even tried switching to an HDMI cable but it did not make any difference.

I have attached some images I took with my phone on what I mean by pixelated. Am I really supposed to see it this way? Am I imagining things and expecting too much after using the retina display for more than 3 years?

https://imgur.com/LfUjTiN

https://imgur.com/swwWd40

Edit: I am on El Capitan 10.11.6

Edit2: The monitor is display as a TV in System preferences. Screenshot below.

I also stumbled on the same issue on my MacBook Pro.

MacBook Pro Retina 15.4" 2014 Model
OS: 10.11.2
Graphics: NVIDIA GeForce GT 750M 2048 MB

Default monitor comes with HDMI input source, so if you plug in an HDMI to thunderbolt the max you will get is 2048 x 1080.

All works well i.e. full 2560 x 1440 resolution if you use Displayport to Thunderbolt cable (which also comes along with the monitor), and also change the source using the monitor menu. I was quite amazed why Dell Support had no idea about this.

Resolutions can be confirmed using the below command.

$ system_profiler SPDisplaysDataType
Graphics/Displays:

    Intel Iris Pro:

      Chipset Model: Intel Iris Pro
      Type: GPU
      Bus: Built-In
      VRAM (Dynamic, Max): 1536 MB
      Vendor: Intel (0x8086)
      Device ID: 0x0d26
      Revision ID: 0x0008
      gMux Version: 4.0.8 [3.2.8]

    NVIDIA GeForce GT 750M:

      Chipset Model: NVIDIA GeForce GT 750M
      Type: GPU
      Bus: PCIe
      PCIe Lane Width: x8
      VRAM (Total): 2048 MB
      Vendor: NVIDIA (0x10de)
      Device ID: 0x0fe9
      Revision ID: 0x00a2
      ROM Revision: 3776
      gMux Version: 4.0.8 [3.2.8]
      Displays:
        Color LCD:
          Display Type: Retina LCD
          Resolution: 2880 x 1800 Retina
          Retina: Yes
          Pixel Depth: 32-Bit Color (ARGB8888)
          Main Display: Yes
          Mirror: Off
          Online: Yes
          Built-In: Yes
        DELL U2518D:
          Resolution: 2560 x 1440 @ 59 Hz
          Pixel Depth: 32-Bit Color (ARGB8888)
          Display Serial Number: XXXXXXXX
          Mirror: Off
          Online: Yes
          Rotation: Supported
          Adapter Type: DisplayPort
          Television: Yes
$