Tenderize steak pieces with a meat mallet. Pat dry.
Mix flour, salt, pepper, paprika, onion powder, and garlic powder in a shallow dish. Dredge steak and shake off excess.
Heat olive oil in a large Dutch oven over medium-high heat. Brown steak 2 to 3 minutes per side (work in batches). Transfer to a plate.
Reduce heat to medium. Add onions and bell pepper. Cook 5 to 7 minutes, until softened.
Add garlic and cook 30 seconds.
Stir in diced tomatoes, tomato sauce, beef broth, Worcestershire, thyme, and brown sugar (if using). Add bay leaf. Scrape up browned bits.
Return steak to the pot and spoon sauce over the top. Bring to a gentle simmer.
Cover, reduce heat to low, and simmer 1 hour 30 minutes to 2 hours, until steak is fork-tender.
Remove bay leaf. If desired, thicken by stirring in a cornstarch slurry and simmering uncovered 3 to 5 minutes.
Taste and adjust seasoning. Serve hot with mashed potatoes, noodles, or rice.