It has to do with the fact that you are using a higher resolution monitor. I will simply assume you are watching a DVD movie which is 720p. When you stretch a lower resolution video to fill a higher resolution something called video interpolation takes place which basically approximates where pixels should be placed so that the movie fills up the entire screen. This can cause this to look a bit fuzzy and it is normal.
This is similar to increasing the size of a picture. Doing so always makes the larger picture look "not as nice" as the original.