Steam potatoes in a steaming basket or in an inch or two of boiling water, covered, until very tender, 20 to 25 minutes.
Meanwhile, cook bacon in a heavy skillet over medium heat until crisp. Transfer bacon with a slotted spoon to paper towels to drain, reserving fat in skillet. Add 2 tablespoons vinegar, mustard, sugar, and a bit of salt and pepper to the hot bacon drippings, scraping up the browned bits.
Transfer potatoes to a large bowl, reserving 1/2 cup of the steaming water.
Add vinegar mixture to potatoes and smash with a potato masher to desired texture, adding reserved water if you like to thin it a bit.