It is possible for bacon to be included in a balanced diet. The trick to any diet is to make sure that the amount you are eating of any one thing is not too much or too little. This means the portion ingested in each sitting and the frequency in which you eat a particular food. Bacon is a meat, and thus a source of protein.
Your body needs protein to grow and maintain muscles. Bacon is also a significant source of fat. Your body also needs fat to function. Too much protein or too much fat is bad for your body. People tend to eat too much fat because it tastes good but some fat is necessary.