electrostatics - How do we conclude that polarized dielectric in electric field reduces overall field?

If we have a dielectric inside an electric field, the dipoles in the dielectric will align in the following direction due to the torque on them by the external field.

The conclusion then is that the overall field is reduced since positive charges appear on the bottom plate and negative on the top, opposite to the applied field.

But if we consider the field of the electric dipole itself, we know that it points in the same direction as the dipole moment.

The dipole moments clearly point in the same direction as the applied field. So shouldn't the field due to the polarized dielectric point in the same direction as the applied field, thus strengthening it?

Answer

You need to at least assume a convention for direction of electric fields. I am using the conventions that is used pretty much everywhere, in this convention the electric field points from positive to negative.

I have marked the external field in blue and field of dipole in green, it is clearly evident that both the fields are opposing and hence cancel each other.

Therefore, the net field magnitude reduces.

Edit/Update (To explain the question raised in comment) :

I think you understand that the field reduces inside the dielectric medium. But pay attention, if you look at the dielectric material on an atomic scale will you call the dipoles the dielectric material or the spaces between them?

When we look at the dielectric material on atomic scales we need to start looking at the dipoles and not outside them because these dipoles are what make rhe dielectric material.

Moreover for a solid or liquid dielectic material these dipoles are far more than the spaces between them, your picture in this sense is a little misleading. The following picture is a better depiction of what is more likely to be found in dielectrics.