This did not happen with all displays. I used an original Playstation with a Commodore 1084S monitor [1] connected via RGB with custom connector I built, using a LM1881 [2] to split the composite sync signal for the RGB mode's separate vertical and horizontal sync. This had excellent sharpness and dithering was always clearly visible. Both the Genesis and the SNES (non-mini versions) output RGB without modification and can be used with that same hardware.
In any case, it's unlikely that blurring was always intended. The article shows a screenshot from Chrono Trigger where a dithering-style checkerboard pattern is instead used to represent the keys of a typewriter. It would be difficult to tell what it was supposed to be if there was enough blur to hide dithering. Official artwork from NES-era Nintendo often showed characters drawn in a sharply pixelated style. And portable systems used LCD displays with no blurring, but dithering was still used extensively.
On CRTs the pixels on PC monitors were arranged differently to TVs, which is why your Commodore screen was sharper than the typical console hook up.
From what I recall (it's been a long, long, time since I've studied this) PC monitors were a typical square grid layout, much like how LCDs are. Where as TVs had the odd and even lines offset by half a pixel - a bit like a hexagon grid.
In any case, it's unlikely that blurring was always intended. The article shows a screenshot from Chrono Trigger where a dithering-style checkerboard pattern is instead used to represent the keys of a typewriter. It would be difficult to tell what it was supposed to be if there was enough blur to hide dithering. Official artwork from NES-era Nintendo often showed characters drawn in a sharply pixelated style. And portable systems used LCD displays with no blurring, but dithering was still used extensively.
[1] https://www.c64-wiki.com/wiki/Commodore_1084
[2] http://www.ti.com/lit/ds/symlink/lm1881.pdf