My mother made a very good Swiss steak. It was one of my favorites as a child. This recipe combines her version with a few extras... sweet bell peppers, capers and balsamic vinegar. I think she would have loved my version. It is a very flavorful main dish and a good way to get some veggies into your family.
(Using a plastic food storage bag is the easiest method for flouring, but you may use your preferred method.) Place flour, salt, pepper, garlic powder and Italian herb seasoning in a plastic bag; close top of bag and shake to combine; set aside.
In large nonreactive skillet, heat oil on medium-high.
While pan is heating, place steak portions in bag with flour and spices; shake well to cover steaks thoroughly with flour.
Place steaks in skillet and fry until browned (about 3 or 4 minutes); turn them over and fry until browned (about 3 to 4 minutes.)
Remove steak from skillet and place on a plate or baking sheet, temporarily, crispiest side up. (It is not necessary for the meat to be fully cooked, at this point, because it will continue cooking after the vegetables are added.)
Add onions, sweet peppers and mushrooms (if using) and saute until onions begin to turn translucent.
Add tomatoes, 1/4 teaspoon salt, 1/8 teaspoon ground black pepper, bay leaf and pinch of red pepper flakes (if using); stir to combine.
Simmer over medium high heat, for 8 to 10 minutes, to reduce liquid a bit.
Nestle steaks, crispiest side up, into the sauce, being careful to avoid totally submerging them; reduce heat to medium-low; cover with lid or tightly fitted aluminum foil and slowly simmer for 30 minutes.
Remove cover from skillet and continue to simmer for 30 to 45 minutes until liquid is reduced and has become a sauce, stirring vegetables occasionally. (You may increase heat some to speed reduction of juice.)
When sauce has reached the desired consistency, remove steaks to a warm plate.
Remove and discard bay leaf; stir into the vegetables and sauce, balsamic vinegar, capers and a generous pinch of parsley.
Taste for seasoning and adjust to your taste. (It will probably need salt.)
Serve the steaks over a generous bed of the vegetables and sauce. Sprinkle with chopped parsley, if desired.