Found the cause of this and it really seems stupid to me.
I did a factory reset and still not working, did not load refresh the package list via web ui.
Then I tested in terminal, opkg update worked fine.
Lastly I check my firewall, and added a rule to allow port 53 to 1.1.1.1 and now it magically worked in web ui as well. Is there some hardcoded DNS setting in Applications->Plug-ins that doesn't care what your DNS is set to in DHCP ?